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Benefits of Buying a Condo

Let’s take a look at the benefits of buying a condo. Condos are almost always more affordable than single family units. This is because you are essentially splitting a lot of the home-owning costs with your neighbors. Individually you own the space within your own walls, but collectively you own the exterior and common areas with all of the condominium residents.

Another benefit is that you never have to do another day of gardening or lawn-moving if you don't want to. Your condominium association will take care of the maintenance of the grounds and any building-wide repairs. Being a condo owner typically means a whole lot less work in terms of home maintenance and upkeep.

Condos usually have several great common areas and amenities that you can take advantage of. These might include a pool, hot tub, tennis courts, a club house, and other recreational areas. Because of the fees you pay, you get full access to these features and they are maintained by the association.

Disadvantages of Buying a Condo

Now let’s look at potential disadvantages to buying a condo instead of a single family home though. One such drawback is the fees for the condominium association. With a house, you can escape such extra charges if you don't buy in a homeowners' association area. The fee charged by condominiums generally increase over time to compensate for inflation, but they can be subject to dramatic jumps depending other factors, i.e. siding, roofing, driveways.

There are also lots of rules that you must abide by if you live in a condo. The association usually stipulates how loud you can be, what type of hours you can keep, what kind of pets you can have, and so forth. Condos definitely do not offer the same kind of personal freedom that a traditional house would.

Finally, a condo is often harder to sell than a single family home. Condos are much more susceptible to market fluctuations and in a slow market, the sales are usually even slower.

Still interested in a buying a condo? Find the answers to these important questions.

What’s to complain about?
Take a look at the condo association's board meetings minutes to see what residents are complaining. If you are reading about bad lawn service, or plumbing problems, then you that the association's management is lax. Even if there are no on-going problems, reading the minutes will tell you about any projects coming up.

Late Again?
Find out about the delinquency rates of current owners. If there are quite a few residents who are not paying the dues on time, this is normally a sign of discontent or that people are upset with the management. It may also mean that the association is under-funded.

Can you fix that?
Ask how much the condo association has in reserve for necessary upkeep. A rule of thumb to keep in mind, if the complex is less than ten years old, then 10% of the cost of replacing items (roofs, roads, tennis courts, swimming pools, etc) should be in the reserve fund. Between 10 and 20 years, then 25%, and at 20 years the fund should be at 50% or above.

Are we covered?
Get a copy of the certificate of insurance, if you look at nothing else. This is a summary of the association's insurance policy. Look to see if replacement costs are accurate. Older buildings may have had some upgrades since the original construction. Make certain they are covered. Determine what the association is responsible for covering and what you, the homeowner is responsible for covering.

What are the financial obligations of a condominium owner?

The financial obligations of a condominium owner are the payment of:

1. Real estate taxes. These monies are generally deposited in an escrow account monthly with the mortgage lender who pays the actual tax bill when it comes due.
2. Monthly mortgage payments, if the property is mortgaged.
3. Monthly condominium fees representing the owner's proportionate share of the costs of maintaining and operating the property.
4. Insurance coverage for the contents of the condominium unit.
5. Utility bills for any utilities metered individually to the unit.

How much control does an individual owner have in the condominium community?

Each owner has a voice in the governing of the condominium community by electing the Board of Trustees or Managers, after an initial period in which the developer maintains control, and through direct vote on certain major issues as provided in the condominium documents.

What is the basic structure of condominium government?

All condominium owners share in condominium government through meetings, election of the Board of Trustees or Managers, service on committees and direct vote on major issues. The Board of Trustees as representative of the owners' wishes, sets policies, hires and supervises to the extent deemed necessary and generally oversees the management of the building. The precise rules governing condominium government are set forth in the by-laws of the condominium and in the supplemental rules and regulations which are passed by the Board of Trustees, usually on the recommendation of committees comprised of unit owners.