Want to own a house but don’t want to spend your entire weekend maintaining it? Or perhaps you want to be a homeowner but don’t want to leave behind your cosmopolitan lifestyle for the suburbs.
If so, a condo unit is just the property for you. When you start looking at Somerset, however, make sure to ask these questions first:
Is a condo right for you?
Different people have different housing needs, and condos definitely cater to its own market. Generally speaking, condos are more suited for busy urbanites who wish to live in the heart of the city. They’re typically young and single, or dual-career couples. Should they have kids, people who live in condos usually have younger children. If you want the white picket fence and wide front yard, perhaps a traditional single-family home is more appropriate for you.
Are your finances in order?
Luxury condos command prices that are comparable to single-family homes. As such, the requisites of buying are similar – at least a 20% down payment and a credit score of at least 650 if you plan on taking out a loan. Likewise, your total housing expenses – including your mortgage payment and home insurance premiums – should not exceed 30% of your pre-tax income.
What are the association rules?
In many ways, a condominium building is like its own country, with its own rules and regulations drafted by the homeowner’s association or HOA. That’s why you’ll want to check the HOA rules before buying a unit. For instance, some condos do not allow pets or limit how much you can modify the interiors of your unit. Should you inadvertently violate such rules, you may even find yourself slapped with a lawsuit by the HOA.
Who manages the building?
Not all condos are run the same way. Some hire a property manager who takes care of maintaining the premises and makes sure that all concerns are attended to. Others are self-managed, meaning the residents themselves take care of running the building. There are upsides and downsides to either option, so weigh them carefully. You should also talk to a current resident and ask them if they’re happy with the way the building is being managed.
What are the association dues?
Remember that bit about not worrying about property maintenance? Someone has to pay for that—and that’s what your association dues are for. The cost is determined by a variety of factors, such as the number of units in the building, whether the property is professionally or self-managed, and if there are ongoing repairs. Fortunately, you can ask for a detailed breakdown of the association dues to see exactly where the money is being used.
How much money is in the reserve fund?
The association dues are funneled into a reserve fund, which is used to finance major repairs or renovations in the building. A condominium with ample reserves can easily shoulder emergency expenses, but those with a smaller fund often have to raise association dues to cover such costs.
A condo, just like any home, is a huge investment, so it pays to ask a lot of questions. It’s important to fully understand what you’re buying into.