Everything You need to Know about Buying a Condo
The US real estate market has been growing slightly with the national home price index (seasonally-adjusted) witnessing an increase of 5% until April of 2016. Many people know it will increase much more in 2017 and 2018 with a pro-growth President at the helm. While housing prices continue to rise in all 20 major US cities, the demand for investing in home ownership keeps strengthening.
In fact, the market reportedly is looking at a problem of less supply of housing compared to the demand. This only indicates that buying a new home is going to cost more in the time to come. If you happen to be a buyer in the current market, it will help if you consider the various housing types available and choose the one best suited to meet your needs as well as your budget.
Therefore, a condominium, or a ‘condo’ as it is most commonly referred to, makes for a far smarter choice as compared to a freestanding single family home. In a condominium ownership, an individual holds the title rights to the enclosed space within specified boundaries defined as a single unit.
This unit is a part of a multiunit development and all unit owners share common interests in all common areas such as lobbies, community facilities, and lifestyle amenities. In the past few years, the condo industry has seen rapid expansion. Here are top three reasons why condominium communities are becoming increasingly popular, especially in urban as well as semi urban areas.
- Freestanding single home buyers have to contend with high cost of land, construction process and post-build lifetime maintenance under individual ownership. In a condo however, whether you decide to buy a new build (pre-sale) or an existing one (resale), since it’s a shared property you don’t have to worry about those issues. The ownership of your unit extends inward from your interior walls, floors, and ceilings. In most markets this works out to be considerably cost effective as compared to individual single family homes.
- Do not worry that much since that the check you will be writing for that dream home will be commensurate with the wish list that you are working with. Lifestyle facilities such as tennis courts, swimming pools, clubhouses, gymnasium, and so forth are not exactly cheap to have under individual ownership. However, in case of condominium communities you are a partner, with all of the other owners in the complex, of the exterior structure (the foundation, exterior walls, and roof) as well as any common areas and amenities.
- Quick accessibility to major commercial districts, centers of employment, medical care, schools and colleges, recreational activities, shopping destinations, and so on will be subject to where you can afford to buy the land. More importantly, the question of land availability will be the bigger challenge. On the other hand, condominium communities are often located in convenient locations.
Top Tips For Buying a Condo
When investing in a condo or buying a condo it’s important to understand that every condominium community is different. One needs to be aware that each community will have their own set of rules, associated common fees, management companies, and amenities. Thorough research is quintessential for making the right property decisions. If you are thinking of buying a condo, here are the top tips you need to know before buying a condo:
- Make a list of ‘must haves’ and ‘wants’. While your ‘must haves’ list should be short and as realistic as possible, your ‘wants’ list could include all that you wish to have in your ideal place of residence. This will help a lot when you have to choose between your shortlisted options.
- Hire a professional real estate agent. First, the seller pays the commission to the realtor if a deal concludes. Secondly, you need someone to patiently listen and answer all your questions to your satisfaction. This may be your first rodeo but it’s definitely not for the real estate agent. Estate professionals have experience and insider information to guide you as to which condominium community is more suited to your specific needs.
- Gain a complete understanding of your financial limits. You should know the upper limits of what you can afford. Ideally you should close the deal much lower than your maximum limit. This also helps in shortlisting the right options to evaluate. There are also buyer programs that can help you with your purchase.
- Budget for monthly expenses. Remember after buying the condo, you still have common fees to account for every month. Taxes, insurance, association fees are some of such expenses. These are very real expenses and need to be factored into your calculation.
- Check out as many options as you can: high-rise or low-rise construction types, with or without amenities, large or small condo communities. Don’t forget to ask questions and check mark against your ‘must haves’ list. Any option that doesn’t qualify on your ‘must haves’, needs to be eliminated, irrespective of how many other wants it satisfies. Always remember, it’s the lack of must haves that will keep you up at night.
- Ask what your condo includes. It’s essential that you find out the details of all inclusions and exclusions of the unit you are buying. You have to know whether a designated parking spot, additional storage area, etc. are available and included in your unit. Also, understand the designated responsibilities towards the maintenance of your own unit, for example, the maintenance of the pipes inside the walls of the condo.
- Once you shortlist any property, ask for a written copy of all the rules and regulations. Condo associations have their own set of rules and regulations which often blind side home buyers after the contract is signed. Study the rules to ensure they don’t conflict with your lifestyle.
- Talk to your neighbors. Even if you are not the social kind, speak to your fellow residents to understand whether they are happy with the building and their thoughts about the general sense of community.
- Envisage your future plans! Yes, you need to have a fair idea of your future plans pertaining to this home purchase. If you intend to stay for a long term, for example 10 years or more, then the appreciation rate may not be as critical as compared to if you plan to move in 2 to 3 years.
In conclusion, buying a home is one of the most important and by far one of the most expensive decisions you will ever make. Choosing to buy a condo for a much lower cost while taking advantage of the area attributes would make it one of the smartest decisions you ever make! According to some reports, condo prices may even drop in 2017 since it may take several months before Trump’s economy starts booming and other reasons, so it is just the right time to invest.