Mortgage Resource Center

What can we say about condos?  They are FANTASTIC for people who appreciate amenities like pools, in-house gyms and proximity to urban meccas or town centers. It can be a gateway to home ownership for Millennials or offer convenience and comfort for Boomers looking to downsize and enjoy life.  In any case, condominiums are a wonderful choice for potential home buyers.

Benefits of owning a condo include:

• No Home Upkeep/Maintenance
• Affordability
• Included Amenities

But with everything good, there are also some trade-offs – Who said perfection didn’t come with a catch?!

We’ll let you in on the 6 things to know before buying that dreamy condo to make sure it fits your lifestyle:

1. Land Limitations
2. Hidden Costs
3. Quiz The Condo Association
4. Study Condo Bylaws & Guidelines
5. Resale Difficulties
6. Proximity Predicaments

Here goes nothing…..

1. Land Limitations

Basically, condominiums are large properties that are divided and sold as individual units. Owning a condo means you own your solo unit and a portion of the shared common areas.  So you don’t really have the luxury or freedom of doing what you like on the property because you don’t own the land.

2. Hidden Costs

You’ll probably budget for the actual condo unit price but you’ll still be responsible for association fees, which upkeep the grounds and maintain common areas.  And even though it may feel like an apartment you rent, you’ll still have to account for taxes on your unit.

One of the other costs that you could cover is when there are major property or building repairs.  If there aren’t any existing resources, your condo association will ask you to contribute monies to fund the fixes. 

3. Quiz The Condo Association

An orderly association or organized management will make it their mission to keep living in a condo a positive experience.  So request meeting minutes or any other memos that pertain to the property management, including the Master Policy or HO6, which will declare if the association insurance has an “All-in” policy or everything except the inside of your unit.

Also, ask for their reserve study, which they should do every 3-5 years.  The study would reveal things like:

• Building condition
• Replacement & expectancy costs for any major equipment/systems
• Pending litigation
• Notices from the Department of Community Affairs or other federal agencies
• Dispute resolution procedures
• Statutory & Regulatory requirements
• Adopting rules process
• Records access
• Budget approvals
• Owners’ applications to do work on their unit
• Delinquency & Foreclosure rates
• Association insurance coverage
• Governmental & Non-Governmental remedies for any owner violation of rights

Interview the Condo Association, too.  You’ll want to ask them:

• Are there any ongoing maintenance issues you may have to pay for in the future?
• When was the most recent time the association dipped into the reserve fund?  What was it for?
• How fast do they address requests and complaints?

These answers will give you an idea of how well the Condo Association manages the property and residents.

4. Study Condo Bylaws & Guidelines

Since you only own a unit on the property (you’re the king or queen of your pad) and nothing below, above or to either side of it, there may be some rules and restrictions to what you could do in your space.

Some bylaws and/or guidelines may include:

• Allowing pets or weight restrictions on pets
• No grills on balconies
• Coverage on hardwood floors for noise reduction (Ask about the building construction – Is noise easily transferred?)
• No storage in the deeded parking space
• Rental restrictions (Ask about the current rental percentage & rules)

You may love the condo and community, but there may be rules that hamper on your vision of what you could do in your humble abode.

5. Resale Difficulties

Your particular unit could be like many of the other units if not exactly the same.  So when you are ready to sell and a lot of your neighbors are selling, it could be hard to secure a buyer.

If you plan on buying a detached abode somewhere and want to rent out the unit, you may also have difficulties doing so.  As stated in #4, some associations have particular rental rules including the number of rentals allowed at one time.  If too many of your neighbors are renting out units, you might get the short end of the stick.

6. Proximity Predicaments

You’ll have no problems with the social experience because of the proximity between you and your neighbors – running into them in common areas, catching up on small talk.

But because of the closeness to your neighbors, you may run into noise levels if you’re having a movie night (they might not want to hear or feel Michael Bay blockbusters if they can’t see it).  Or your neighbors may have a party you didn’t get invited to but you feel like you’re there because you share walls and ceilings.

Hopefully, we’ve shed some light on owning a condo before you snatch it up – make sure the condo life really fits your lifestyle.

If you know a condo is a perfect for you, figure out your mortgage rates and get pre-approval or call us at 201-393-0200 to speak with one of our Home Loan Experts in Elmwood Park, NJ.