Friday, July 2, 2010

Pros and Cons of Buying Condos

When looking to purchase a home, it's always important to first evaluate your most important needs, and try to match your needs with a property that fits those needs. If you are looking for a place that is low maintenance and inexpensive to purchase, a condo might be a good fit for you. Before you make your decision to purchase a condo though, let's look at what exactly a condominium is as well as the pros and cons of condo living.

Some people think that a condo is defined by it's structure. When people here the word "condo" they imagine a small one story apartment type building. This definition of a condo is actually not correct. A condominium is actually not defined by a certain type of structure or building. A condominium is actually has to do with the ownership rights you have for the property. With a condo, you really only own the property on the inside of the unit. The exterior of the structure and the land that the condo sits on is owned by the condominium association. You can have two different structures that look exactly alike, but one is a condo and one is a townhome. With the townhouse, you own the entire structure you live in and the land it is on. With the condo, you only own the inside of the structure.

Pros of owning a condo

Maintenance- One of the most attractive features about owning a condo is that you do not have to worry about nearly as much home maintenance. When you own a condo, you usually pay a monthly condo fee to the condominium association that you live in. The fee covers things like lawn care, the roof of the building, a termite bond, pressure washing and maintaining the siding on the building, maintenance of all the common areas, and insurance on the exterior of the building. If you are a person with a busy lifestyle or you just don't want to deal with the hassel of mowing the lawn or trimming may be for you.

Amenities-Often times, condo communities have amenities such as swimming pools, basketball courts, tennis courts, club houses and fitness facilities. Some people enjoy being able to use these amenities. The condo fee that condo owners pay will cover the maintenance of these amenities.

Cost of Purchase-Typically condos sell for cheaper than single family homes. This makes them ideal for people who do not want to spend a lot of money on purchasing a home.

Social living- If you live in a condo community, you are surrounded by plenty of neighbors. This can be a great opportunity to meet and be around people.

Cons of owning a condo.

The monthly condo fee- While you do get something in return for the condo fee you pay, sometimes condo fees can be quite pricey. Condo fees can range based on the community anywhere from less than a hundred dollars a month to several hundred dollars a month. If the condo fee is high enough, it's almost like having a second mortgage. Also, if a condo association does not have enough money saved up to pay for a needed large expenditure such as repaving the parking lot and roads, the condo association can issue an additional special assessment on all the condo owners. This brings me to my next point.

It is important to evaluate the condo association's financial statements before you purchase a condo. If the condo lacks the amount of reserves that it needs to fund future expenditures, you can be sure that you will have to pay a special assessment at some point to make up for the lack of needed funds. Also, if you find out that a lot of condo owners are not paying their condo fees, there is a chance that condo fees will be increased for those who are paying their fees. Either that or the condo association will begin to neglect maintaining the properties and common areas.

Limited Outdoor Space-When you purchase a condo, you have no yard that is considered your own. All you have is the common areas. This means you usually can't have gardens, put up fences or anything like that.

Lack of Storage-If you own a house you usually have a garage, carport or outdoor storage facility where you can store things. With a condo, you usually don't have these places to store stuff. When you are purchasing a condo, it is a good idea to budget for a separate storage expense.

Less Privacy-If you live in a condo community there are people all around, so you have less privacy. Sometimes also you will have people living above or below you, so you have to take into consideration the noise factor when you are purchasing a condo.

Resale-When purchasing a property, many people don't plan on living in that property or owning that property forever. With this in mind, being able to re-sell the condo in the future is important. The fact is that there are less people looking to buy condos as opposed to people looking to buy single family homes and townhomes. Less buyers in the market to purchase your property will make it more difficult to sell your property in the future. Also, in our current real estate market, it is very hard to find a lender who is willing to finance the purchase of a condo in Florida. This means that the amount of people looking to buy condos will be lowered even further, which will make it even harder to sell your condo in the future.