Buying a condo can eliminate a slew of the stresses that come with homeownership. The units usually cost less than a traditional home, and the shared maintenance will see you kicking back while someone else tends the landscaping. Typical amenities like a pool or tennis court aren't too shabby, either.
But buying a condo differs from buying a regular home in one major way: You have to live with a condo board that regulates many aspects of your everyday life. And the wrong one could send those once-low stress levels through the roof.
"One of the biggest considerations when purchasing a condo is who manages it," says David Nelson, a real estate expert with Minneapolis' Imperial Home Team. That's why, before you sign on the dotted line, you should arm yourself with these questions for the condo board to make sure it's the right fit for you.
What are the fees?
Most condos have a monthly fee that can range from $200 to $400 (an upscale development with tons of amenities will cost more). Ask the board exactly what that fee covers -- after all, you'll be shelling out month after month, and year after year.
What's usually included is anything outside your condo, from cleaning public areas to removing snow to maintaining the community pool.
Owners themselves generally pay for whatever is inside the walls of their condo, like painting and appliances. Make sure what you're getting is on par with what you're paying for, says Nelson. And always ask if the board sees the fee rising anytime in the near future, and how much it's risen in the past.
Can I see the financial statements?
A condo's financials should be an open book (or, more accurately, a spreadsheet). And don't worry if you're not an accountant. You should quickly be able to determine if a condo's income and expenses match up -- a red flag would be more money going out than coming in.
Also eye the condo's reserve funds to see if it's healthy enough to cover any unforeseen expenditures. If not -- and the pool pump breaks -- that could result in more money coming out of your pocket to fix the problem via an assessment (see our next point).
Are there any upcoming assessments?
Assessments are periodic one-time payments made to the association above and beyond the monthly fee, usually to cover capital improvements or repairs. So if the association plans to replace all the windows in the common areas or add a gym, you could end up blindsided by a huge extra bill -- unless, of course, you ask ahead of time.
What are the rules?
Each association has its own unique bylaws and regulations which all buyers should review before their purchase, as they have to live by them afterward. So make sure you read every single one.
Many of the rules are mundane, dictating where residents or guests can park. But some condos have rules that can range from no holiday decorations on your front door to limits on hours for barbecuing. Another biggie in condo rules is whether a homeowner is allowed to rent out their home, and for how long. While you may not want to rent it out, the ability to do so -- or not -- could affect your resale value. Did we mention that you should read the rules? Read the rules.
Are there any pending lawsuits?
Lawsuits are a potentially huge financial drain on any condo board that loses in court. And even if there are no pending suits, a quick check of a condo's liability insurance to make sure it's up to snuff can't hurt.
Who is the caretaker?
Properties generally have a manager on-site to oversee day-to-day tasks. An employee who has been with a condo for a long time is generally a good sign your calls will be answered in case a maintenance issue pops up.
-- -- -- -- --
Watch: The Features That Help a Home Sell Fastest