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CONDOMINIUMS: Pros and Cons
Condominium townhouses and apartments offer home
buyers an alternative to the traditional single-family detached
house. Is a condo a good choice for you?
What is a condo?
Condominium housing is typified by its multi-unit
design (townhouses or apartments) and its ownership structure. A
corporate entity, usually called the condominium corporation,
represents the joint ownership of the individual unit owners. In
other words, each owner of each townhouse or apartment privately
owns his or her unit interior and collectively owns the common
elements. The common elements might include the grounds and
walkways around the complex, parking lots, recreation facilities,
and so on.
Should I buy a condo?
Buying a condominium townhouse or apartment
requires some thought about your lifestyle and long-term plans.
The following questions will help you to think about whether or
not a condo is for you.
1. I don’t have time or don’t want to mow the lawn, shovel
snow, etc.
Yes No
2. I don’t mind paying extra for services that I might not use.
Yes No
3. Over the next five years or more, my lifestyle will not change
to require different accommodations.
Yes No
4. I can live happily in a multi-unit complex.
Yes No
5. I don’t need to control everything about my living
arrangements.
Yes No
6. I can live with some rules that might limit my decorating
choices and lifestyle habits.
Yes No
The more "yes" answers you chose, the better suited you
are to condominium living. If you chose "no" to some
answers, think about what it is that you want from a home. If your
idea of home ownership includes a garden, you’ll probably be
dissatisfied with a condo apartment. Perhaps you’ll be happy
with a townhouse that has a private backyard. Or, if your present
lifestyle is suited to a one-bedroom condo apartment but you plan
to have children within the next few years, perhaps you should
consider something that offers room to grow.
What are the major pros and cons of
condominiums?
PROS &CONS
Convenience: Because the grounds and common elements are usually
maintained by the complex, you don’t have to bother with mowing,
cleaning leaves out of the eaves troughs, or many other home
maintenance chores. You might also have extra facilities such as a
pool and tennis courts that are also cared for by the maintenance
service. Of course, you must still maintain the interior of your
own unit.
Maintenance and security services also let you come and go with
less worry about your home. This is a plus for people who travel a
lot or who otherwise have busy lifestyles.
Loss of choice and control:
The same convenient maintenance services also mean
that you lose your choices to landscape, garden, and decide what
the outside of your home will look like. Many complexes even
specify what you can use for window coverings, (in order to
preserve a unified look on the outside). Whether or not you like
the landscaping, or use the pool and other facilities, you must
still pay for them through your monthly condominium fee. Also, if
the condominium corporation decides to do major repairs or
improvements to the complex, you might have to pay an extra amount
of money; sometimes thousands of dollars.
Affordability: Except for luxury condominiums (which are priced
for their features and location), many condos offer more interior
living space for the
money. A three-bedroom townhouse typically costs less than a
similar three-bedroom detached house. Also, condos offer more
choice of smaller units (one-bedroom and two-bedroom) for people
who don’t need or want a full-sized house.
Less resale value: Condominiums are more vulnerable to downturns
in the real estate market. They are usually the first to drop and
the last to recover. Even in stable or hot markets, condos tend to
appreciate less than detached houses with similar features.
Lifestyle preferences: Some complexes are designed for people with
specific lifestyle preferences. There are buildings for adults
without children, seniors, and so on.
Limited renovation options: The nature of condominiums leaves
little room to expand or modify your unit. Many complexes forbid
interior modifications. Changes made to your unit can affect the
overall structure of the building itself. Therefore, if your unit
no longer suits your needs, you must
usually sell and move.
What should I look out for when buying a condo?
In addition to all of the things you would check in a
non-condominium home (it’s location, condition, features, etc.),
you should also check:
The real estate agent and lawyer: Although this not an absolute
must, it can be beneficial to use a real estate agent and lawyer
who have experience with condominium sales. Condominium
transactions differ from those of non-condo real estate.
The condominium management: Whether the condominium is run by a
property management company or is self-managed by a group of
owners, the management will greatly affect your satisfaction with
the complex.
You can judge the management by looking at the overall condition
of the complex; (more on that later). But the best way to check
them out is to visit several owners. Ask them how long they have
lived in the complex and if they have been happy with the way
it’s run. You might get lots of happy
recommendations or lots of horror stories. Ask if there have been
major repairs or improvements within the past several years and if
so, did the owners have to pay extra for them. Also, have the
condominium fees increased a lot each year or are they stable or
at least, staying with inflation.
The unit: Try to visit the unit you are considering during hours
when the neighbors are at home. Listen for noise coming through
the shared walls, or if it’s an apartment, through the ceiling.
You should not hear everyday activities in the neighboring units.
A well-constructed unit should be soundproofed enough to shut out
regular noise.
The condition of the complex: Don’t limit yourself to just
checking the condition of your unit. Walk around the entire
complex. Look at the building exteriors, the lobby, the grounds,
parking garages, recreational facilities, and so on. Everything
should be well-maintained. If you see signs of neglect, look for
another complex. Don’t invest in a poorly run complex. You’ll
be unhappy while you live there and you’ll have difficulty
selling your unit.
Ownership structure: Find out what you are buying. Typically, you
will own the interior of your unit, while the exterior - or common
elements will be collectively owned by you and all of the other
owners. Where it can sometimes get confusing is with such things
as parking spaces and yards. In some complexes, you will own your
parking space's) while in others, the spaces are collectively
owned but you have exclusive use of an assigned space. In
townhouses, you might own the backyard but the front yard is a
common element, and so on. Your lawyer or real estate agent should
be able to get this information for you. Or, you can ask the
condominium management for written specifics about what is
privately owned and what is collectively owned.
Rules and bylaws: Each condominium corporation has a written set
of rules and bylaws that govern the conduct of owners and visitors
while in the complex. Most are common sense guidelines (such as
rules about noise, parking, etc.) to maintain peace and harmony.
However, some complexes go further. This is especially the case
with special lifestyle complexes. For example: some might forbid
or restrict children and pets. You can get a copy of the
condominium bylaws from the management. Check them to see if
anything will conflict with your lifestyle or long-term plans.
Condominium fees: Condominium owners pay a monthly fee to cover
such things as maintenance and insurance of the common elements,
utilities, and other services. When shopping for a condo, check
the fee amount and what it covers. (This should be included on the
feature sheet. Or, ask your agent or lawyer to find out for you).
Compare the amount of the fee to that of similar condominium
complexes. Some complexes are more efficiently run that others and
therefore have lower fees. Also, try to avoid complexes that
include all utilities in the fee. This is the most expensive way
to pay for utilities. That’s because the fee is set to cover the
most wasteful users. In other words, you could be subsidizing the
people who waste electricity and heat. It is better for you if
each unit is individually metered and you can pay your own
utilities.
As a well-informed condominium buyer, you should get a townhouse or
apartment that will give you years of satisfaction and a good return
when you decide to buy.
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