8 Questions To Ask Before Buying A Condo

Key Takeaways

  • Condos are individually-owned units of which the encompassing property, amenities and common areas are co-owned by the members of a homeowner association.
  • Often more affordable than single-family units, condos open up the possibility of homeownership to new groups of people.
  • When deciding whether buying a condo is the right fit for you, make sure to familiarize yourself with homeowner association fees and rules.

Buying a condo provides investors and homebuyers with a viable alternative to purchasing a single-family property. A condominium, or condo for short, is a unit within a group of units where the homeowner owns an individual unit, but the encompassing property and common areas are shared with other owners. Whether you are a homebuyer or investor, chances are, you have found stand-alone properties to be financially prohibitive at times. In this case, buying a condo opens up the possibility of ownership to new groups of people.

Aside from offering an affordable investment option, condos offer several unique advantages for owners. First, many condos are found in locations with high property values, such as urban centers and popular vacation destinations. This opens up opportunities for buyers who want to own a vacation home, invest in luxury condos abroad, or even accommodate certain lifestyles. Other homebuyers may find condos attractive for the amount of square footage, social aspects, and access to convenient amenities. For example, retirees may want to downsize from a single-family property and enjoy a sense of community with neighbors. Condo residents often enjoy amenities such as gyms, pools and maintenance services, to name a few.

Is Buying A Condo The Right Fit For You?

Before diving into the process of buying a condo, it is imperative to thoughtfully decide whether or not investing in condos or living in a condo is the right fit. For homeowners, they will want to consider the difference between living in a stand-alone property compared to a condo. A first major lifestyle change will have to do with sharing walls, common areas and facilities with multiple neighbors. However, a trade-off is the prospect of having access to amenities, a possibly more convenient location, and not having to take care of many chores such as yard maintenance. Financially, although a condo may offer a more affordable purchase price, the buyer should be aware of homeowner association (HOA) dues.

As an investor, make sure that the HOA rules will allow for the type of investing activity of your choosing. For example, some HOAs will not allow owners to rent out their unit, or be an absentee owner. In addition, for those wanting to rehab and sell a property, keep in mind that renovation rules can be very strict. In addition, find out the number of absentee owners in the building. If there are a large proportion of absentee owners, it could signal the number of competitors that will impact your ability to sell the unit. Finally, be mindful of how monthly HOA dues could impact your net cash flow.

For more details, feel free to use this step-by-step guide below to buying a condo:

buying a condo

 

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Real Estate Investing Strategies
Real Estate Investing Strategies
Real Estate Investing Strategies
Real Estate Investing Strategies
Real Estate Investing Strategies
Real Estate Investing Strategies