If you’re currently considering buying a home, you may be playing with the idea of purchasing a condo. Condominiums are buildings in which individuals separately own the air space inside the interior walls, floors and ceilings of their unit, but they jointly own an interest in the common areas that they share – such as the land, lobby, hallways, swimming pool, and parking lot.
Below, Todd Hetherington, CEO of Century 21 New Millennium outlines some pros and cons of going with a condo, and highlights things you should know before buying.
Why Buy a Condo?
“Condos are an appealing way to enter the housing market if the cost of a single-family home is out of your reach,” explains Hetherington. “Condos are especially popular among single homebuyers, empty nesters, and first-time buyers in high-priced housing markets.”
The high price of single-family homes and the influx into the housing market of more single homebuyers have made condos relatively hot national investments. They have held their value as an investment despite economic downturns and problems with some associations.
Hetherington notes that condominium associations have also worked hard in recent years to clean up their image. Disputes and lawsuits were once rampant. But now associations have become savvier about property management and have taken steps to prevent legal problems and disputes.
Condo vs. Single-Family Home
“Unlike a house, condos offer a lifestyle that is free of yard work and exterior maintenance and repairs,” says Hetherington. Many condominium communities also offer amenities such as exercise rooms, tennis courts, and swimming pools that you might otherwise be unable to afford if you purchased a single-family home.
However, there are financial differences between condos and traditional homes. “In addition to paying a mortgage, each owner is responsible for paying a monthly fee to the condo association, which is made up of the unit owners,” explains Hetherington. The fee covers maintenance, repairs, and building insurance.
How Do you Choose a Good Condo?
“If you’re considering buying a condo, seek ownership in a well-maintained building, and pay special attention to the financial health of the condo association,” suggests Hetherington. Lax maintenance may be a sign of financial trouble, which could result in higher maintenance fees and problems trying to resell the property later.
Things to consider:
• Get a copy of the latest financial statement from the condo association.
• Ask the board of directors – which is elected by the unit owners from among themselves – if major repairs or improvements are imminent. If so, find out how much they will cost and whether there is enough money in the reserve to cover them.
• Check the by-laws, rules and the covenants, codes and restrictions (CC&Rs). You may find, among other things, that they prohibit or restrict pets and the renting of units. Some may require that the board have the right of first refusal on the sale of any unit.
• Learn everything you can about the homeowners association, including legal disputes and conflicts. Start by reading the minutes of the association meetings.
• Find out the owner-to-tenant ratio. Because many condominiums are often purchased as investments, there could be a high percentage of tenants in the building.
For more information on purchasing a home, please contact Century 21 New Millennium at firstname.lastname@example.org, 800-382-1101, or Century 21 New Millennium.
About CENTURY 21® New Millennium CENTURY 21 New Millennium, www.c21nm.com, is a full service real estate brokerage company specializing in residential and luxury properties. In addition to the Capitol Hill location in Washington, D.C., the Virginia locations are in Alexandria, Centreville, Culpeper, Fredericksburg, Gainesville, Loudoun, McLean, Stafford, and Woodbridge. The Maryland offices are located in Annapolis, Columbia, La Plata, Lexington Park, Lusby, Prince Frederick and Waldorf. Its core services include: mortgage financing, investing, settlement, property management, property insurance, global relocation assistance, and commercial real estate.