If you decide to become the owner of a condo, you may want to consider a few additional factors before investing in a space such as this. Because purchasing this type of residence requires a few different expenses and forces you to consider other elements, it is important to do a little extra thinking and research.
A condo can be a great investment, especially for someone who wants to build equity but still treasures the community offered by apartment living and available amenities when living in a complex.
The homeowners association is responsible for keeping an area neat, clean, safe and up to the standards of those who live in the complex and pay the fees. The group sets various regulations to ensure a strong community environment with ample opportunities and access to desired amenities, according to Home Guides.
Decide which regulations are important to you
When looking for a condo it is also crucial to consider the homeowners association that works to provide a stellar community for that complex. You want to ensure the regulations line up with your lifestyle and what you want when you invest in a property. For example, if having ample recreational facilities, such as pools, that are regularly maintained is important to you, check with the homeowners association and see if this is a priority.
In addition, you will want to ensure you find a condo that does not limit your personal lifestyle. For example, if you own a dog and the homeowners association has strict policies against dogs and other pets, the condo is likely not suitable for you.
Consider asking about becoming involved in the association if expenses and requirements are important to you. You may be able to control some of the costs and expenses the group is responsible for and save money on monthly HOA fees.
Decide how much you can afford
When developing your budget for a condo you must also consider how much you can afford in HOA fees in addition to a monthly mortgage. Bankrate emphasized the importance of creating an all-inclusive budget that considers the full price of the home, the monthly mortgage, closing costs and HOA fees.
"You see a lot of great deals on condos right now," said Roger Winston, a real estate attorney. "But given the current financial environment, you have to do your due diligence on the HOA to make sure you aren't buying into a situation you can't afford."
When house hunting, know how much the HOA fees are and do your research regarding the history of these charges.
Know the building's HOA fee history
By looking at the past few years of HOA fees, you can gain a deeper understanding of the financial security of the association, according to Realty Times. Try to find at least the past three years of HOA fee history when considering the purchase of a condo. This will help you know the approximate amount you will regularly expect to spend on HOA fees.
"Buyers should be looking for a steady financial picture," said Allison Scollar, a real estate lawyer, according to Bankrate. "Big yearly spikes and dips in spending are good signs the building is in trouble."
Become familiar with the HOA fees in the area
In addition, you should also know how much you can expect to pay in a neighborhood or certain region you are interested in buying within. Enlisting the help of an experienced real estate agent can help immensely with this. Their knowledge and understanding of current market trends can help you decide whether you need to find a new area to meet your budget or if an HOA fee is fair.
When searching for a professional real estate agent, look for individuals who have experience specifically with the selling of condos. This indicates they will be able to provide more assistance during the process. They may also have connections with a home inspection company that specializes in condo evaluations or other real estate professionals who can help during your search for a new home.
Know how to save
As mentioned previously, involving yourself in the HOA is a great way to create change in your living situation. It can even help you cut costs. Zillow, an online real estate company, indicated you can save money by working directly with the association to lower your monthly fees. You can help renegotiate insurance premiums, lower property management fees or find other ways to help encourage savings that can be passed down when paying for a condo.
When searching for a condo, don't forget to factor in your HOA fee and consider becoming involved with the association to help tailor it to your needs.