Is a condominium the right choice for you? Condominiums, or condos as most refer to them, homes that are located within a development area, and which are usually attached by common walls, offer both affordable housing and a carefree lifestyle. Such homes provide a form of ownership where you own your individual unit but share ownership of all common properties—parking, land, recreation facilities, etc. Because they are usually priced significantly less than traditional single-family homes—as much as 25% or more in some areas—condominiums are often viewed as a great option for first-time buyers.
As with other purchases though, condo ownership isn’t necessarily a one-sided positive experience; there can also present be significant drawbacks, such as, much slower appreciation, potential for additional costs due to unexpected repairs or maintenance of common areas. Condo owners also face the additional burden of paying a monthly association fee to maintain all common areas.
On first glance, the idea of condominium living often appeals to many, but be aware that it’s not just the communal living and sharing of expenses that you’ll face. Associations may have strict rules and regulations that can be a serious turn-off to others; and if you object to a lack of individual control, it’s probably not a lifestyle to consider.
There are some advantages to condominium ownership, however. Some empty nesters who have lost interest in yard work and who like the idea of having an abundance of neighbors while still maintaining private ownership see condos as a great choice. And in most cases all of the exterior maintenance is the responsibility of the association. By sharing repairs with dozens of others, individual costs can be significantly less than that of detached homes.
Finally, condos may have expensive amenities that would be far beyond the budget of the average homeowner. Many offer deluxe pools, spas, tennis courts, and gyms. If that prospect appeals, check out your local condo project, but be aware that you and your neighbors will be on the hook for repairs and maintenance of such facilities.
If you are considering a condo you’ll need to confirm the financial stability of the association to avoid future surprises and assessments in the future; and there are several documents you should ask to see, such as:
- A copy of the current budget
- The current financial statement of the association
- Minutes from several recent meetings
You’ll also need to review the condominium documents—The Declaration of Covenants and The Condominium Bylaws—to check for unusual or objectionable rules about parking, pets, noise restrictions, gatherings, or other provisions which might provide an unpleasant surprise in the future. Ask if there are any planned assessments, pending lawsuits, foreclosures, or restrictions on renting units (a high percentage of rental units may cause property values to decline).
And of course you’ll still need a home inspection, but not just of your particular unit, hire an inspector familiar with condominiums and have them check the entire building. They’ll be able to tell you if the roof will soon need replacement, asses the condition of the exterior siding, and describe other issues of which the association may not be aware.