Considerations When Buying a Condo or Townhouse
The lifestyle of condo or town home living is a great fit for people in all walks of life. Lower prices for-condos and town homes when compared to single family residences enable first time home buyers to affordable them. Price and ease of social interaction appeal to those who are separated or divorced. Boomers wishing to downsize, but don’t wish to move to a “senior-only” community find them most desirable.
If you think that condo or town home living is possibly for you it’s important to keep in mind that there’s a lot more to consider than just the condition of the particular unit itself. Take a look around the development and make a mental note of these important items:
Are the common grounds well maintained?
Are the exteriors of the buildings in states of disrepair or are they updated?
Do the residents of certain sections seem to have more pride of ownership than others?
If properties for sale back up to the main road, what kind of a buffer has the association provided to block out the noise from traffic?
Talk to residents about the positives and negatives of living there (especially the negatives). Remember, you’re not only buying a home, but you’re also buying into the community as a whole.
Here are things you’ll need to know about the community before you buy:
Are there any pending lawsuits or liens against the association?
Accidents can happen at any time. This is why associations have insurance. But if an association has a lawsuit pending the bank may not lend you the money to buy in that development until the lawsuit is settled. Additionally a lawsuit could put the association into fiscal bind, and that will significantly impact resale value.
What percentages of the units are investor-owned?
Banks have a strict limit on the number of investor-owned units that they like to see in a condo or townhouse development. Usually this number is around 30%. If the number of investor-owned units is close to this number (or higher) you might be better off considering another development. The reason for this is that banks negatively view a large population of renters in a community (the theory being that renters don’t take care of a property as well as owners and if the number of renters hits a tipping point, it will bring down property values across the community).
Is the Association fiscally sound?
An association that is financially struggling to keep up with the maintenance and needed improvements will begin to show. It may have a pool, but can’t afford to open it. It could have tennis courts but they are in such disrepair they cannot be used. If you are looking in a development after the pool and/or clubhouse are closed, you need to find out if these things were in fact open and operating well during the summer season. All of these factors contribute not only to your enjoyment of living in a community, but will affect your return on investment when you wish to sell. A development that has not been carefully maintained lowers everyone’s property value.
Read the Association Rules and Regulations
One item that many buyers forget to review before purchasing a town home or condo is the Association’s Rules and Regulations. Here are some examples that could impact your life:
Pets – May or may not be permitted. If dogs are allowed there may be a restriction on size.
Parking – Trucks or vans may not be permitted to park in the development. If you have one, you may have to have alternate arrangements to park somewhere else. Also in general is the parking situation a free for all or are there assigned parking spaces.
BBQ Grills – Many do not permit gas or charcoal grilling.
Gardening – You may or may not be permitted to plant flowers, shrubs or other vegetation.
Decks or Patios – You may or may not be permitted to add one or the other.
Window Treatment Restrictions – Some associations require that all window treatments used have white liners to give the exteriors…