Real Estate Articles - Buying Condos

Checklist for Buying a Condo

5/19/2006 4:43:48 PM by Laura Duggan

As a second home or investment, condos make great sense. However, they differ from single-family homes in some significant ways. Your neighbors are attached. You share maintenance costs and decisions. You are part of a community. Given all this, it is important to do your homework before buying the condo. You are buying a lot more than just a floor and a few walls. Here's our ten-point checklist.

1. Read the condo rules (CCRs) carefully to be sure that you agree with all the rules. These include rules such as renting out your condo, hosting visitors, age limits etc. Do you agree with all of them?

2. Research the finances of the homeowners association.

Are they in debt?
Is the budget balanced?
Is there an emergency or reserve fund?
What were the last major expenditures?
What are the upcoming expenditures? For example, if new roofing has been postponed, is it going to come up while you are an owner, increasing your costs?
When were the last two homeowner fee increases? What percent did they increase by?
Are they harmonious? Read the minutes of the last few homeowners meetings.

3. What natural hazards does the condo area face, and what plans are in place to deal with them? (Earthquakes, floods, hurricanes, etc.)

4. Who is the maintenance company?

Ask the neighbors about their responsiveness. How long does it take when you call in with a maintenance issue to get it resolved?
Is the maintenance company on-site?
Is it dedicated to your condo, or does it cover many others as well?

5. What is the noise level of your unit, and also of your building?

Visit it at several different times during the day.
Are children home and running about?
Are TVs loud at night?
Who is above and below you?
Be sure visit the unit when your neighbors above you are home and interacting. (I almost rented one unit that was so quiet, I could meditate there at any time. Then, as I was going to sign the lease, the owner, who had been showing it to me, stepped upstairs to his unit to talk to his wife. To my shock, I could actually hear the conversation from downstairs! That was the end of that.)

6. What is the community like?

Does it meet your needs in terms of how much social activity and how much privacy you require?
Are they transient or permanent, and does that match your planned use? (ie, snowbirds, lots of renters, or long term residents?)

7. What is included in the monthly fees? Are they comparable to other nearby condos?

8. Are all the normal disclosures included as part of the contract? (defects, lead-base, termite inspections, etc.)

9. What is the occupancy rate and rental rate?

How long do vacant condos stay on the market?
What has been the property appreciation rate?
Are there newer developments planned nearby that would devalue your condo?
If you want to be able to rent it, what is the rental market like?
Are there any restrictions on your ability to rent?

10. What is the surrounding area now, and what is planned?

Is the parking adequate?
Is the lighting outside adequate?
Are there road renovations in the works?
How old are the recreational facilities?
Is there public transportation within or adjacent to the complex?

This list is not meant to be daunting, nor comprehensive. A condo can be the easiest investment you will make, if you just do a little homework.

The author Laura Duggan, is a free-lance writer and editor. For more of her work, visit Inquiringlife.com