Get The Facts Before You Buy A Condo

The benefits of buying a condo, especially in an urban area

, are great. Owners have access to downtown amenities, no yard work to worry about, and the outside maintenance of the building is not their responsibility. Condos are also affordable and frequently provide services like internet and cable. Real estate investors are drawn to condo investment, particularly in urban areas and college towns where condo and apartment living is the standard. However, whether you're buying or investing, it's important to get all the facts about the condo before you buy.

Condos, townhomes, and single-family properties all typically have Home Owner's Associations that pay to keep up the common areas around the neighborhood. In a condo, however, common areas are much more extensive than in townhome and single-family home neighborhoods and typically require more upkeep. Condo owners really only own the space from wall to wall. They don't own hallways, parking spaces, sidewalks, exterior siding, roofing, or even the space between their wall and their neighbor's wall; and HOA fees have to pay for the upkeep of everything the owners don't own. Add to that any extra amenities like internet service, a clubhouse, a gym, or even a pool and the HOA fees can get huge. Most HOA fees range from $100-$700 per month, but it's certainly not unheard of for them to go higher.

Condo owners that choose to rent their property need to keep HOA fees in mind when they decide how much rent to charge. Before they decide to invest in a condo they should get information about current HOA fees, recent fee increases, and (if possible) about how the HOA treats the residences and how well they maintain the property. HOA's will also occasionally charge "special assessment" fees for any unforeseen issues or fixes done to the building in general or to the owner's individual property. People who rent can't be counted on to pay HOA fees on a property they don't own, so condo owners should be careful to make sure all of their expenses are covered in the cost of rent rather than itemizing the monthly bill.

Newer buildings typically have lower HOA fees because the buildings require less maintenance, so investors should consider looking for new properties if they want to buy a condo. However, there will always be a property that goes against expectations, so investors really just need to do their homework any time they consider investing in a condo.

by: Jacque Crook

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