Buying a Condo – 4 Tips to Help You Buy the Right One

1.
Know what you’re buying

When
you buy a home, there’s no doubt in anybody’s mind as to what you’re buying:
the home and the yard and any other structures on that yard, and you own them
free and clear.  With condos, you’re
buying space. Your property line starts in the middle of exterior walls and ends
on the other side in the middle of exterior walls.  And the same vertically, your property line
begins in the middle of the floor and goes to the middle of the ceiling.

You’re
also buying a shared interest in the land and the building, the common areas.  And that means it’s not enough to like the
unit you plan to buy, you need to pay close attention to the common areas.  If there are going to be repairs to the
common areas, you’ll be partly responsible for paying for them.

2.
Know the association

You
need to take a close look at the budget and at minutes of the meetings.

The
budget should show that there’s enough money coming in to cover monthly costs
(garbage collection, maintenance crew, etc.) and enough reserves to cover
predictable but not monthly work the building will need (painting the hallways,
changing the carpeting in the hallways, etc.). 
That means it should be at least 5% of the association’s gross operating
budget.

You
should know what’s the exact percentage you own jointly (the things outside
your condo unit that you own).  You can
calculate how much you have to pay for special assessments and how much voting
power you have.

And,
since we’re talking about special assessments, find out if there are any coming
up. Find out when the last one happened. If in the last few years, find out why
it was necessary, why the expense had not been anticipated.  Also, find out when were the last few times
that the regular association dues were raised. 
Too many over a short period of time indicates something’s not right.

Know
your association also means you read the master deed and the declaration of
covenants, conditions and restrictions carefully. Reason one: you need to know
what you can and cannot do in your condo unit and in the condo building/project
before you invest money. Reason two: it will give you a better idea about how
your neighbors view themselves, what they value.

3.
Know your neighbors

It’s
best to buy in a complex where the other owners have situations similar to
yours.  For two reasons:

a.      Some of
them are going to be on the board of directors, making up rules, the rest will
be voting for those rules.  It’s best if
you’re in the first group. But if you’re pulling right and everybody else is
pulling left, you’re going left.

b.     You have
less privacy in a condo than you have in a home.

4.
Find out about insurance

Yes,
the association will have insurance.  But
that insurance doesn’t cover everything you buy when you buy a condo.  Find out what is not covered and buy your own
coverage for that part of your property. 

You
need to have many things be right to buy a condo you will love living in.  The above four tips will help sort through
your options and make a better decision the next time you buy a condo.