Why You Might Not Like a Condo
Are you thinking about buying a condo but are not sure if you should? The prospect of purchasing a condo can seem like an excellent idea for many people. You have the advantage of less maintenance to do on the home and more facilities, but there can be downsides. There are reasons why you should not buy a condo. The most significant being they are not right for everyone. For some people, a condo can be a godsend, while for others, they can turn into a complete nightmare.
As with most things in life, there are pros and cons to owning a condo. One of the best tips for buying a condo is understanding how they are different than owning a single-family home right up-front.
Let's take a look at some of the issues you need to consider before the buying condominium option is chosen. Some of the reasons why you should not pursue a condominium may cause you to re-think your decision.
Sticking to the Rules
One of the most significant reasons people end up hating their decision to purchase a condo is others being in control of vital decisions. Over my thirty plus years working as a real estate agent, I have heard tons of complaints from people who never realized how much they missed living a home where they were king of the castle. Most condos are run by associations that make the rules that owners must abide by.
If you don't like the rules, guess what - that's too bad! The HOA will mandate that you follow their practices as well as paying their monthly fees. The rules will often be things which should make living in the condo more pleasant, like restrictions on noise and parking.
Though they could have rules which aren't suitable for your situation as well, like a no-pets rule or restrictions on home-based businesses. Where some people really lose their mind is when associations start putting restrictions on the simplest life pleasures like being able to hang a flag or plant some flowers out front.
If the HOA has the wrong people in charge, you'll probably find your daily life to be a living nightmare. Many people that join these boards have nothing better to do with their life than make overbearing rules that make others miserable.
Understanding typical association rules are vital in order to figure out whether you will be able to handle condo living or not.
Paying Monthly Fees
With fewer maintenance responsibilities, there is a cost; you can expect to pay monthly to the homeowners association. This fee will cover the upkeep of the building and the facilities it offers. There will be building insurance included in this, and it could also sometimes cover heat and electricity as well as other expenses.
Depending on the facilities offered, the monthly costs could be considerable. This is especially true if you are looking to purchase in a sought after location or somewhere with a lot of amenities for the owner.
Where fees can really add up is when there are special assessments for repairs or improvements that may be needed throughout the neighborhood, such as replacing all the roofs or decks throughout the complex. It is vital to know before committing to purchase if there are going to be any substantial outlays shortly.
If you are unable to keep paying these monthly HOA fees, you could find yourself facing eviction even though you own the home.
Lack of Space
Choosing to buy a condo usually also restricts the space and flexibility the home will offer to you. While this will be fine for many, it could mean you have to make some difficult choices when it comes to your furniture and possessions. You may find you need to sell or donate your furniture or other stuff you own.
Some buildings may provide extra storage space, but this isn't the norm. If you have a lot of possessions and are moving from a larger home, you will have to make some cutbacks to the things you bring with you.
Often, condos lack much, if any, outside space. Some may benefit from a balcony, but the use of such spaces could be restricted by HOA rules even then. More importantly, there will be no option to make an addition to your property. You will be stuck with what you buy.
Getting Along With Your Neighbors
Condominium living often means close proximity to your neighbors. This means that you need to be considerate of them, and they need to do the same for you. If you are unlucky, you will find yourself with a neighbor who plays loud music or has frequent marital arguments. This could make living in your home unpleasant or restrictive on your life.
It will be essential to check on how well the party wall is insulated. Older condominiums typically do not have the same sound protection as newer units. You could find yourself in a situation that is very problematic. Dealing with unbearable noise is another significant reason not to buy a condo.
Mortgage Issues
You can get a mortgage for a condo, but there could be some issues. If you are looking to the Federal Housing Administration for a loan they have some restrictions. If your development isn't on their approved list, you won't qualify. Getting an FHA loan with a condo can be a problem.
Again, sometimes the association is too foolish to spend the money to get the neighborhood FHA approval. Not doing so can be extremely shortsighted as it severely restricts the number of buyers who will be able to purchase. FHA financing is extremely popular, especially with first-time home buyers.
If you are looking for a mortgage from another lender, there could still be problems. Lenders will look at factors like insurance coverage and non-payment of HOA fees in your building when assessing your eligibility. If the condo association allows too many rental properties, they could also make it problematic for new buyers to get financing. They call this situation being warrantable. Lenders do not want to see a significant percentage of renters in neighborhoods they are financing.
Selling a Condo
When you come to sell your home, the choice of condo living could present more problems. If the condo market is flooding with nearly identical units, you could find yourself waiting a while to sell. One of the substantial differences between homes and condos is a home's uniqueness. There are likely to be many other very similar properties available, too, meaning that demand isn't going to improve the value of your home either. This could result in you having to lower the selling price of your condo to get more interest from buyers.
Thanks to all this, condominiums don't tend to increase in value as fast as normal homes. You are likely to face the situation of your condo being on the market for longer before you get a buyer.
Is Condo Buying the Right Choice for You?
There are pros to buying a condo as well. You shouldn't think about it as a doom and gloom situation but more of a research project. I happen to own a home, as well as two properties with an association, one of them being a villa condo.
A condominium could offer an exceptional living experience for you. Still, it does come with many potential problems that you need to think about. Are you going to be happy with the lack of space and outdoor access? Do the monthly HOA fees seem reasonable, and are the rules they place on the complex right for you?
Location plays an important role in your home buying choice. If you are looking to live in a busy city location, a condo could be ideal. If you want to live in the suburbs, perhaps a condo isn't such a good fit, with fewer choices available and more spacious housing for sale. Before committing to a long-distance move, you should have these considerations figured out. Hopefully, this review of why you may not want to buy a condo has opened up your mind.
If none of these things seems like a problem to you, just make sure you do all the necessary due diligence before making a commitment. Lean on your real estate agent to find out all the answers to your questions before putting up your down payment. The most fool-hardy decisions are made in haste. These are the ones people regret later on when it is too late.
Other Valuable Active Rain Media
Get more helpful real estate guidance in these recently published Active Rain resources:
- What are the costs to sell my home - get a detailed overview of what a seller can expect to pay in closing costs. Many sellers are surprised at closing but unexpected fees. Financially surprises are the worst kind. Make sure you know your expenses to avoid disappointment.
- How much is the commission to sell my house - one of the most asked questions from consumers to real estate agents is "how much is the commission?" When it comes to commissions there are no standard rates. In the article, you will get a detailed overview of what you need to know about how agents get paid.
Use these additional resources to make the best decisions in a real estate transaction.
Comments(1)