What to Look For in a Condo

Whether you are a first-time homebuyer or a retired empty nester, purchasing a condominium may offer many benefits. Generally less expensive than purchasing a single-family home, condos also appeal to homeowners wishing to forego the responsibility of maintenance and upkeep of their homes.

Buying a condo is not merely a financial investment; it also is an investment in the community and the people living near you. Consider such factors in your purchasing decision, which are as important as cost and location. When considering purchasing a condo, make sure to look closely at the following:

Assessments: Condo association dues are a separate expense from the mortgage payment and are generally paid monthly. Dues may cover everything from insurance on common areas to snow removal. But they vary and can be steep, especially in older buildings with elevators, and it's your responsibility to know what they cover - and what they don't. Associations set aside a portion of the dues to use for unplanned expenses, known as a "reserve." If the reserve is unable to cover the unexpected costs or unresolved debt, associations can impose special assessments, requiring condo owners to pay additional fees on top of the regular association dues. Many states require condo associations to follow laws regarding operating funds and reserves, and such laws vary widely by state. Be sure to understand the bylaws of the association so you know how it is governed.

Budget: Be sure to get a copy of the association's operating budget before buying a condo. Also ask for financial statements, rules and regulations, insurance policy and master condominium deed. Every association is run differently, so knowing the operating costs and association budget will help you avoid running the risk of buying a condo in a financially unstable association.

Resale potential: Condos typically appreciate slower than single family homes do, making it more worthwhile as a longer-term investment. Certain units, especially end units on higher floors, will likely attract higher offers, as will owner-only units in comparison to those that are leased. If you plan on reselling your condo, also consider the appeal of the location and amenities for potential future buyers.

If you are wondering if condo living is right for you, contact your local REALTOR®.