Tired of mowing the lawn? Ready for a low-maintenance lifestyle? Perhaps it’s time to consider buying a condominium. But before forging ahead, consider the following.
When you buy a single family detached residence, you become the exclusive owner of the structure and the property it’s located on. The property boundaries distinguish what is yours from what belongs to your neighbors.
When you purchase an attached dwelling such as a condominium, you obtain exclusive ownership rights to the interior fences, shared walls and facilities-with other owners in the condo (also called a planned unit development or PUD).
As a condo owner, you automatically become a part of a homeowner’s association to which you pay dues, usually on a monthly basis. Homeowner’s dues usually cover the cost of maintaining and insuring the common areas. Precisely what the homeowner’s dues cover varies from one complex to the next, so make sure you find out what’s covered before buying. The dues should also fund a reserve account to cover major expenses like resurfacing tennis courts or replacing homeowner’s roofs. When looking at the budget, make sure a Reserve Account is in place.
Buying a condominium involves some of the same issues that are involved in buying a detached home. The unit should minimally meet your housing needs, be within your price range, be reasonably priced and be thoroughly inspected by a professional home inspector. But additional issues come into play when you buy into a PUD.
FIRST-TIME TIP: Attached housing projects are governed by Covenants, Conditions and Restrictions (CC&Rs) that restrict ownership rights. For example, CC&Rs may include restrictions on remodeling, parking and renting. Some CC&Rs prohibit pets. On the other hand, they will also restrict your neighbors from painting their homes red and making sure their yards are not cluttered with junk. CC&R’s are actually geared to make sure everyone is treated equally. Make sure that you read and understand the CC&Rs before you buy. If the CC&Rs are cumbersome and incomprehensible, hire an attorney with expertise in PUDs to review the CC&Rs for you.
Be sure to read the bylaws and articles of incorporation of the Home Owner’s Association and review a current financial statement. It’s also advisable to obtain copies of the minutes from the last several homeowners’ association meetings.
Find out if the homeowner’s association is involved in any litigation. Perhaps you’ve heard horror stories about condo owners suing the developer for shoddy construction. If a condo seems under priced, there may be a reason for this. If the association loses the case and does not have sufficient reserves, the condo owners might have to pay to repair the defects.
One of the best ways to get information about a PUD is to talk with current owners. Be sure to ask what they like and dislike about living there. How is the soundproofing? Are there any parking problems? Is there ample storage space? Are the current owners satisfied with the homeowner association management?
A condo that is unique should raise a red flag in your mind. One buyer paid top price for a condo that had an enclosed balcony that was furnished as a home office. Years later, the association management began strictly enforcing the CC&Rs. It was only then that the buyer discovered that the balcony renovation was in violation of the CC&Rs. The CC&Rs clearly stated that the only furniture allowed on the decks was patio furniture. The lack of a home office diminished the value of the condo significantly because it was a small studio unit. When the buyer sold, she sold at a loss.
Living in a PUD has many advantages, especially if you only use your condo part of the year. You don’t have to worry about maintaining the yard when you are not there. Many PUD’s in the Palm Springs Desert Area are gated and have community pools and spas. Some have tennis facilities, and others have dynamite views overlooking golf courses.
Top 7 Tips for Buying New Construction Homes
IN CLOSING: In terms of resale, a 1- or 2-bedroom condo is a better investment than a studio. And if you have two bedrooms, make sure it has two bathrooms, as a two bedroom one bath condo is a poor investment. And difficult to re-sale.
Click here for FREE Reports on Buying Strategies.
Would you like to make a comment on this article? At the end of each of these weekly messages, there’s a place at the end of each article for you to add comments. Just Click on “No Comment,” it will open up and you can write your comments here. It’s a great place for you to “let YOUR thoughts be known on the various articles written. Be My Guest………I‘d love to hear from you! Others would too!
Brought to You By Your Favorite Realtor,
Nancy Hankin
www.PalmSpringsHomesAndEstates.com
October 27, 2009 at 4:50 pm |
[...] Now that you are ready to buy, click here to learn what should you consider when buying a townhouse or condo? [...]