There are many benefits to owning your own condo — chief among them the fact that you own your property. However, along with the benefits, there can be unforeseen hassles. For example, a condo can be more than a financial commitment; it's a social commitment as well. In this article, we'll examine these considerations to make sure that your new condo life is a great one.
If you are thinking about making a purchase shortly, don't forget to consider the ways condo living could affect your life. (Haven't bought a condo yet, but plan to? Check out Buying A Condo and Investing In Real Estate.)
Costs for the condo owner usually don't stop at the mortgage.
While you can use tools like a mortgage calculator to shop around for a favorable interest rate on your loan, you'll also have to think about things like monthly owner fees, sometimes called condo association fees, and homeowner's insurance. The association fees pay for things such as general upkeep and insurance of the condo complex. If the gate to your complex's parking garage breaks, the fees you and your neighbors pay will go toward fixing it. These fees also pay for the condo's insurance, which covers major situations that affect the complex as a whole. It's important to note that these fees never go away.
Most of these expenses and fees should be broken down in your condo's bylaws. Make sure you're familiar with them to avoid any unforeseen holes in your monthly budget. Also, owner fees typically don't cover things such as theft from or damage to your individual unit. To cover these, you'll also need to get your own homeowner's insurance policy. (To learn more, see Insurance Tips For Homeowners.)
The Social Setting
When you're in buying mode, it's common to think only in terms of dollars and cents — a condo is a huge purchase, after all. But it's essential not to forget the social aspect of living in a condo. Different complexes work well for different kinds of people, so get to know your complex as well as your prospective neighbors to make sure that they're a good fit for you — if you're easing into retirement, it might not be a great idea to buy a condo next to a bunch of hard-partying college kids or vice versa.
Before you make a purchase, knock on a couple of doors and introduce yourself as a potential buyer. Make your visit count - ask your future neighbors questions about the complex that aren't being answered by the real estate agent, or ask the same questions again to get a different perspective without the sales pitch! Not only can you learn a lot about the people you'll possibly be living next to, but you can gain insight into how much they enjoy living in the complex. (For more on the social considerations you should take into account, read To Rent Or Buy? There's More To It Than Money and Are You Ready to Rent?)
Breaking Down the Agreement
Condominiums have bylaws that govern residents and make sure everyone is happy. These bylaws, also known as "covenants, conditions and restrictions" (CCR), are a legally binding document that you'll have the chance to look over before you buy your condo. In the CCRs you'll find information about fees, parking, pets and any other rules you will need to know.
According to Realtor.org, the most important parts of the CCR to pay attention to are the complex's operating budget, subleasing and remodeling restrictions. If you don't feel qualified to judge the CCR by yourself, it's probably a good idea to take it to a lawyer or your real estate agent. While getting an expert opinion may cost a little more in the short run, it could save a bundle down the road.
Make Your Voice Heard
When you buy your condo, you might find that you're not happy with certain aspects of the bylaws. If this is the case, there are ways to get things done without causing too much of a ripple. The best way to get your voice heard is to sit in on homeowners' meetings for your complex. At these meetings, the governing body of the complex will get together to discuss issues that have come up.
At homeowners' meetings, you'll have the opportunity to address your concerns. Remember, though, the people you'll be talking to aren't faceless bureaucrats - they're your neighbors. Don't start a war. While it's always a good idea to make sure your needs as a resident are met, make sure that you're not creating a situation that will make life at the condo unpleasant.
As much as you might want to run a pit bull farm from your home, a lawsuit against your complex probably won't win you too many friends. When you live in a close-knit environment, it's essential to pick your battles.
The Bottom Line
Don't pack up that moving van just yet - condos can be a great place to live, but only if you spend the time to look into what life will be like in your future complex. Don't let unexpected speed bumps, such as condo association fees and bylaws, keep your condo life from being enjoyable.
If you've decided condo living is meant for you, it's time to start Shopping For A Mortgage.