Ready to leave apartment living behind?
Overwhelmed by the prospect of having to maintain a single-family home after purchasing?
Or are you looking for a more affordable option for your first home?
Let’s talk about condos.
It’s a competitive market out there, and more people are considering condominiums in order to take advantage of their financial situation, without the risk associated with buying a single family home. Plus, with homeowners in the driver’s seat in today’s market, this is your chance to gain some more control over your situation.
A condo gives you all of the benefits of homeownership, without a lot of the hassle required to make sure your home is in tip-top shape year-round.
Although there are plenty of differences between owning a condo and a single family home, we want to get you prepared with 10 things to consider when buying a condo.
Because with a rising cost of ownership, condos provide a wonderful alternative to staking a claim in the world of real estate.
What is a Condo?
A condominium is a multifamily building divided into several dwelling units.
Unlike apartments, each unit in a condo is individually owned. Plus, condos come with jointly-owned common areas around the grounds, such as parks, pools, and lounge areas. These common areas are shared between everyone living in the area, with regular upkeep and maintenance paid for by association fees.
In more dense urban areas, condos are typically found in higher rise units. While in more suburban neighborhoods, such as Southern California, we find many single level condos that share walls between neighbors in the same building.
Lower Price to Own
According to the National Association of Realtors, condo prices are typically 12-16% lower than their similar single family home counterparts.
This is because when you buy a condo, you are purchasing the interior space of your unit, while most of the outer parts of the property are the responsibility of the homeowners’ association. The land and other facilities in the complex are owned in common with all of the other homeowners.
Many condos, especially in the suburbs of California, still have backyards. Though in downtown regions where high rise buildings are more common, this feature may not be an option.
However, the lower price gives potential homeowners more “bang for your buck,” allowing you to enjoy the benefits of homeownership in an ultra-competitive housing market.
What is Your Lifestyle?
Do you want to mow the grass, trim the hedges, and paint the outside of your home when the time comes? Or how about forking over thousands of dollars to replace the roof?
If you’re up to face these challenges, then by all means, go for that single family home.
But if the prospect of working outside in the sun to maintain your yard makes you sweat before you step outside, then you are perfect for a condo.
Keep in mind that you’ll also be sharing walls and common areas with your neighbors. If this is a dealbreaker for you, then a condo might not be the best fit.
When touring a condominium complex in Southern California, envision what it would be like to live there. To mingle with your neighbors. To enjoy a sunny afternoon at home on the weekend.
Not all condo complexes are built and run the same, so pay attention to the feeling you get when walking around and touring the facilities to make sure it’s the right fit for you and your lifestyle.
Find an Agent That Knows Condos
Much like no condo complexes are the same, neither are real estate agents.
Some specialize in single family homes and larger estates. Some in bungalows and cottages.
Take notes on the specialties of agents you are considering and don’t be afraid to ask them questions about the best condos in the area. Many will also have crucial insights into the HOA’s of these communities and what homeowners can expect when living there.
And yes, we know a thing or two about condos in Southern California.
What Amenities Do You Want?
If you’ve got a few kids that love to swim, a pool is a must. Ample green spaces and park areas can be the perfect spots to walk the dog in the early evenings. Some complexes even have banquet spaces perfect for family reunions and weekend barbecues.
It’s all about what best suits you.
Don’t just tour the interior of an individual unit when looking at a condo available for purchase. Take the time to drive around the parking areas, walk through the grounds, and chat with the main office if the complex has one on site.
These insights and areas may not be at the top of your list when looking at a home purchase, but they’ll be an integral part of your experience as the owner of a condo.
Research the Homeowner’s Association
Almost all condo complexes will have rules and regulations over how you can utilize the common areas and how the exterior of your home should look. Your homeowner’s association ensures that the property grounds are well-maintained and looked after, with input from all of the owners in the complex.
But let’s face it, some are better than others.
Do your research online to find any reviews on a particular complex and homeowner’s association. Or, if you’re feeling particularly bold, ask a neighbor some questions about their experiences with those in charge of keeping things neat and tidy around the complex.
Chances are, if you’re reading and hearing things that leave you feeling uneasy or unsure, it’s best to trust your gut and look elsewhere.
When Are Association Meetings?
Most condo complexes host a yearly meeting with all of the members in the area to discuss upcoming projects, any rule changes, or incoming fee increases. It’s important to attend these meetings in order to understand what’s going on in your complex and make your voice heard.
After all, the homeowner’s association is there to keep things running smoothly for all of the residents in the complexes. So if you skip these meetings, you run the risk of missing valuable pieces of information that can cost you down the line.
Ask About Upcoming Special Assessments
A special assessment is an extra charge the condo association imposes to fund a significant project in the complex. These assessments are usually voted on by the board, or even all of the residents in the community. Examples include replacing roofs, installing new windows, or changing out garage doors.
Ask about these special assessments before purchasing, as you can use that knowledge to drive the price of the home down. If you know that the complex will be requiring residents to install new windows in the next 12 months, you can factor that into the final price.
Well-run condo associations do a wonderful job of avoiding these special assessments with proper financial planning and utilization, which is another reason to do your research before making a purchase.
Financing May Be More Complex
It’s hard enough to get the right financing when buying a home. But there can be a few more hoops you’ll need to jump through when buying a condo.
Lenders tend to charge slightly higher interest rates for condos. They’ll also want to see more detailed financial information about the condo association, such as the amount of reserves, rules and regulations, and their budgets for the year.
Talk to your experienced realtor if you’ll need any additional, condo-specific paperwork to fill out during the buying process and you’ll be just fine.
Know the Rules on Short Term Rentals
If you’re an investor looking to utilize a condo as an AirBnb rental for a portion of the year, make sure that the complex allows for short term rentals.
Many complexes don’t allow rentals shorter than six months. This ensures that everyone in the condo community does their part to maintain their individual unit.
Plus, you get the added benefit of building a better sense of community with your neighbors, one of the main advantages in purchasing a condo in the first place.
