Buying a Condo?
Condos could be starter home. When searching for yours keep few things in mind to make well-informed decision.
Any Peeve Points of Current Residents
Always a good idea to do talk with existing residents, try to know If there are any complaints/annoyances that’s not being addressed. Best source – if you can peek at latest Meeting Minutes of Association.
Insurance Cover – check exact coverage
Condos Association’s Insurance policy will tell you exactly what is covered. If its older condo you may want to know if the insurance covers cost to make the building code compliant. Also check if re-building estimates are current. (Your insurance agent might be the right professional to help you understand this document, get a copy.
Other important item to check – if policy covers your personal living space (roof leak, accidental fire, etc.) If not then consider purchasing one insurance to cover these items.
Check if the rental cap has reached. If you wish to stay then this really doesn’t matter, however, if you foresee a situation where you would like to rent out your property this will matter.
Rental Cap is the limit to number of renters allowed in a given condo (also called occupancy rate). If rental cap has been met then you need to be in HOA Waiting List to rent out your unit.
CC&Rs (Covenants, Conditions & Restrictions)
In short these are HOA (Home Owners’ Association) Rules that all residents are required to follow. The key to these are description of limitations of what you can do with your property. (For example, mowing your lawn and keeping it clean!) Some rules are straight forward but some may be very restrictive, for example, mandating cars to be in the garage only and barring you to use the garage for any other purpose, size of pets permitted (Yup!!), etc. Noncompliance may result in fines, forced compliance, even a lawsuit.
You may not want to regret later, so it’s a good idea to pay attention.
HOA Monthly Dues
Understand monthly how much you are paying and what these costs will handle? This fee is calculated based on number of units, cost to maintain the property (includes short term and long term). Understand the breakdown of monthly dues Make an effort to understand funds that are set aside for any litigation, planned maintenance/major repairs.
As a thumb rule, each complex should have repair fund (pay attention to this). Repair fund handles the cost to repair major items (roof, common facility like swimming pool etc.). If a condo is –
- Less than 10 years then it should have 10% of the cost to repair major items
- More than 10 to 20 years then it should have 20% of the cost to repair major items
- More than 20 years then it should have 50% of the cost to repair major items
Common Areas vs. Your Area (my porch?)
Understand this definition of space, you will find this information in the Master Deed. The balcony/porch may be part of your unit but are you the owner? Who should maintain this space (repair, etc.)
Condos are preferred choice for many
In short, condo means shared responsibility and often make for great first home. Reasons are clear –
- Garbage disposal, repairs of common features (building sidings, roofs, window upgrades, etc.) are all handled by the Association (which means less headache of ownership)
- Condos can be more affordable and offer convenience; and often provide lot of facilities like swimming pool, tennis court, gym, community picnic/function room etc.
- For many the community feeling is very important and condos provide this
- Insurances are cheaper