Is a condo right for you?
Thinking about buying a condominium? It’s important to know what you might be getting into. Here are some things to help you decide if condo living is right for you.
When you buy a condo, you own an individual unit within a shared complex. Unlike an apartment, you have the freedom to renovate and customize your space. But, you typically have to share a wall or two, which gives you less privacy than a single-family home. Buying a condo means you agree to be a member of the homeowners’ association (HOA) and must follow their rules and pay any required HOA fees.
There are pros and cons of buying a condo. Make sure you consider all the options before you buy.
One of the biggest pros of condo living is low or no outdoor maintenance. Typically, you don’t need to worry about things like lawn mowing, show shoveling, cleaning gutters or landscaping. When compared to single-family homes, condo units are often located in the middle of the action and close to dining and entertainment. Condos can be more affordable than other homes in the same area. Every condo building offers different amenities (some charge extra fees), but some common amenities that you could enjoy are a gym, pool, parking garage, community rooms, rooftop terrace or pet area. Your neighbors are nearby, and shared common spaces make it easy to meet new people and create a sense of community.
The cons of condo living start with interest rates. Condo mortgages may be higher than single-family homes or townhomes, due, in part to the added risk of being part of a shared complex. Loan requirements may be stricter with a condo than a home since you and the condo association must meet certain eligibility guidelines. In most condo buildings, there’s a required HOA fee that covers things like insurance, maintenance in common areas, outdoor maintenance or upkeep on amenities. Your neighbors are in close proximity, and you’ll likely share walks and common spaces, so be prepared for less privacy than a single-family home. Condos tend to appreciate at a slower rate than single-family homes. Lastly, condo associations have all kinds of rules, like quiet hours, pet policies and lawn ornaments, so make sure all of the rules fit your lifestyle.
If you own a condo you can be exposed to special assessment fees. A special assessment is typically a large fee charged to cover a big project within a condo community, like a structural repair to the building or roof replacement. If you’re buying a condo, it’s really important to know if a special assessment is in future plans. If it is, there’s a chance fees could go up for a period of time to cover that cost.
If you decide to look at condos, here is a list of questions you should ask: What are the HOA fees? What do the fees cover? How old is the condo building? Older buildings are going to need more maintenance. What amenities are offered? How many parking spots are assigned to each unit? Is there extra storage available? Are pets allowed? What type of outdoor maintenance (windows/doors) is typically done for each condo? How are special assents handled?
Next week I plan on writing about condo insurance and condo financing.
Bob Hollick is a State Farm Insurance agent based in Washington. His column appears every other Friday in the Observer-Reporter.