If you’re a first time home buyer or are looking to downsize the size of your home and maintenance, looking at a condo could be a good option for you. However before you make a final decision, there are a few things that you need to consider.
First of all there are the legal differences. A single family home comes with all the land around it and gives total control of its (legal) use to its owner. Condos, however, can only be possessed from the outside of the inside walls and anything beyond that is controlled by what is supposedly a democratic rule of all of the owners of the complex. In other words, no, you may not paint the front door red with white polka dots or chop down the messy willow in ‘your’ front yard.
Check the amenities. Be aware of what you are buying – if you are not going to use the pool or tennis court, you are still paying for them in your monthly condo fee. The more amenities, the more expensive the upkeep, both today and in the future.
How old is the condominium? If it is brand new, check the reputation and experience of the builder.
If it is an existing condo, investigate its history. Is it well managed and maintained? Is there a pattern of special assessments?
Check the monthly fees, and understand what they cover. If it is a new condo, be prepared for the possibility that the fees may increase. Condo fees are usually
only guaranteed for the first year of operation, so the fee quoted today may not be the one you will actually pay tomorrow.
How is the condo corporation managed? Some properties may be self-managed or looked after by either a small or large property-management company. Is the company reputable?
Are there any current disputes among owners that the Association is trying to resolve? If owners are fighting to the near death over one or more issues, you may want to think twice about buying into a hornet’s nest.
Inquire about the Board of Directors. Does it show a history of financial responsibility financial? Above and beyond the normal kinds of things that you need to do, you absolutely must look at the condominium records and documents. Take a look at the minutes. Is this a properly run, stable organization? Are there constant resignations; does it appear that little ever gets accomplished?
In addition to a thorough document review, talk to people who own units. What do they have to say. Look around the development. Does it appear to be well maintained? Are there annoying signs posted everywhere suggesting dysfunction?
Have there been any special assessments in the last three years? Are there major maintenance or improvement projects anticipated in the next 12 months? Are there sufficient reserves to cover those expenses?
How are utilities billed? Condos are going green and, if energy costs are billed on a per-unit basis, then you have more control over your energy use and monthly cost.
Are any units rented? Buildings or complexes with a higher proportion of owners in residence may result in more stability and less vandalism.
Of course, there are other things to consider but this list should be a good start in helping you decide if a condo is the right choice for you.