What Do You Hace to Know When You Buy a Condo

15 of Our Best Tips for Buying a Condo

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Ready to leave apartment living backside, but not quite set up for the responsibility of a yard and more than i,800 square feet of interior maintenance? A condo gives you all of the perks of homeownership simply without all the tasks that come with caring for a unmarried-family home—like raking leaves, mowing the lawn, or cleaning the gutters.

Although a condo is a corking compromise for those who aren't quite ready to take the plunge into running an entire house, there are some stark differences betwixt a condo and a single-family habitation that buyers should know when getting ready to purchase one. Want to learn how to buy a condo? Here is some helpful information:

Commencement, what is a condo?

How does one ascertain a condo? And how is information technology different than an flat? A condo is a single residential unit that an individual owns inside a multi-family unit edifice. Structurally, an apartment building and a condominium complex are the same in that there are multiple units inside one building, just the key difference is that apartments are generally for rent and condo units are individually owned.

In add-on to a mortgage, condo owners pay monthly or quarterly fees to a homeowner'south association, which keeps money in reserve for the upkeep of whatsoever shared spaces similar the yard, common areas (a gym, pool, etc.) and shared structures, such as the roof.

And what are the pros and cons of buying a condo?

There'southward plenty to consider when trying to determine if a condo is the right type of domicile for you lot.

"If you value proximity to a urban center center, a walkable lifestyle, want to take advantage of a building with amenities similar a gym and pool and don't want to be bothered past excessive abode maintenance and repairs, a condo might be the right selection for you," says Kristen Pollock, a real manor agent in Atlanta.

Nonetheless, a condo—especially condos with associations that all residents are required to vest to—can come with some strings attached, says Jody Zink, a real estate agent in Toledo, Ohio.

"Not every condo clan is alike. No 2 are the aforementioned. Considering of that, you have to navigate unlike rules or potential pitfalls, or fees you might not have expected otherwise," she says.

Now, here are 15 of our all-time condo-buying tips from existent estate experts across the country:

1. Bank check the rental cap when ownership a condo for investment

Buying a condo can be a way for you to break into being a landlord, but beware of any rules on renting the unit of measurement out, says Jesse Sheldon, a existent estate amanuensis in Kirkland, Washington.

"Many complexes take policies on whether y'all can plough your condo into a rental. Some accept rules that say no rentals immune at all, while others accept a cap to the amount of rentals," Sheldon says.

2. Prepare for politics

When whatsoever group of people live together nether 1 roof, at that place's potential for trouble. Combine that with making group financial decisions and you lot accept a recipe for a highly charged living state of affairs. Depending on how your clan works, there could exist plenty in reserves (AKA the money pot comprised of HOA fees) to accept care of big maintenance projects similar replacing the roof, or information technology could be a situation where everyone has to concur to contribute when the demand pops up.

"Everybody has to concord on chipping in [for projects]. But if there's a guy in ane unit that doesn't want to, information technology can go kind of pasty," says Zink. "In other words, everybody has to be on the aforementioned page."

Before you purchase a condo, go in with the understanding that you may have to negotiate or work things out in a HOA coming together with other residents to become tasks accomplished.

3. Understand the realities of ownership a condo vs. buying a firm

When yous purchase a condo, yous own the interior of your space, but not the exterior, whereas when you buy a house, you get the whole kit and caboodle. (Read: Buying a firm comes with much more freedom.) So in that location'south that, and the fact that you're in shut proximity to all of your neighbors.

"Sharing walls and mutual areas is not for everyone. This shut community living can be a sense of aggravation or frustration," says Bryce Fuller, a real manor agent in Glenview, Ill. "Shared garages, mailbox areas, hallways, foyers, pools, elevators, stairways, and exercise facilities are subject to anybody's usage."

4. Financing may exist more than circuitous

Equally if getting financing to buy a dwelling wasn't complicated enough, in that location are more hoops to jump through when buying a condo, Fuller says.

"Lenders tend to accuse a slightly college interest rate [for condos] and will desire to run across the association budgets, reserves, and possibly even the rules and regulations," he says. "If in that location are many units that are beingness rented out, sometimes financing is fifty-fifty more than difficult. Depending on the lender, your required downwards payment may even be higher."

Though financing is more complex, it'southward certainly non impossible. Talk to your agent and lender to see what extra condo-specific documents you'll need to make the procedure get smoothly.

5. Non all condos volition work with an FHA loan

If y'all're planning on purchasing your condo with an FHA loan, you should be aware that non every single condo is eligible for FHA financing. Withal, the FHA rules on condos loosened up a bit in 2019, making it easier for buyers to get this blazon of financing.

To find out if the condo you're looking at is FHA approved, yous tin head to the HUD condominiums folio and expect up the address in question.

six. Check whether pets are allowed

When you own a single-family home, the merely rules on pets are the ones imposed by the city. Simply in a condo, there may exist weight or breed restrictions—or even a ban on pets altogether. If owning a pet is important to you, and then be certain to bank check the condo clan's CCRs (covenants, codes, and restrictions) for rules on animals before you lot fall in dear with a place.

7. Look over the condo clan'due south documents for upcoming projects

Owning a unmarried-family home ways you accept the liberty to exercise habitation improvement projects and update your space as you wish. Condo dwellers, on the other hand, are at the mercy of the condo clan when it comes to upgrades on the exterior or in shared spaces. Luckily, there's a way to see if whatsoever planned projects are coming up before you buy.

"Make sure to review the condo documents for any special assessments or projects in the well-nigh future. These assessments can embrace things like roof replacements, shared space upgrades, or driving/parking area paving," says David Stroh, a real estate agent in Frederick, Maryland.

eight. Talk with the neighbors

It's nearly impossible to know what life is actually like in a detail condo circuitous—unless you tin score some insider info.

"Strike up a conversation with the neighbors or with the condo clan president to see what other people recall," Zink says. "Just accept it with a grain of table salt: If someone says something negative, endeavour to detect a way to verify it."

9. Gene in HOA fees

When calculating what your monthly housing costs will be, don't forget to gene in the HOA fees if you're buying a condo. Although it's an added cost, sometimes they can save yous money, Pollock says.

"Sometimes a heir-apparent will be put off past a large monthly HOA fee, just look a little deeper: Does it include water, trash pickup, and even cable Television set? These are costs you would be paying in a house as well merely they won't be budgeted out for yous," Pollock says.

10. No two condo associations are alike

Condo associations are all the same in that they're a group of people living under the same roof. But the similarities end there. Condo associations are all run differently—and how they operate can take a big issue on your experience in the building.

"Some organizations are going to be well funded while other associations will say, 'Oh, we're just going to non charge a monthly fee.' But when it comes fourth dimension to replace a roof or exterior things, it'due south got to come up out of someone'due south pocket," Zink says.

To get a feel for what you lot're stepping into, talk to the president of the association, suggests Zink.

xi. Wait at the condition of the common areas

When evaluating a condo, it'due south crucial to non only look at the interior of an individual unit just also to look at the state of things in mutual areas, says Fuller.

"Often if the mutual areas are not kept well, it is a sign of a poorly run association," he says.

While on a tour, practice a quick visual inspection of the walls and floors, and check to see if the equipment is working in a gym.

12. Discover out when the association meetings are

Making upgrades to a single-family house doesn't require lengthy discussions with neighbors. But when you're part of a condo association, meetings must exist held.

"New owners should make sure they know when the annual meeting is held, and [they should] nourish to take part in of import decisions regarding the complex," says Rhonda Mesenbourg, a real estate agent in North Kingstown, R.I.

13. Be your own inspector

If you go to the inspection stage of a real estate transaction, the inspector will inform you of any major bug within the unit of measurement. Merely earlier that happens, know that the first line of defense against buying a problematic (and expensive-to-fix) property are your own two eyes.

"Look for cracks in the tile and walls," Fuller says. Poorly constructed buildings could mean there are high-price repairs in the time to come.

14. Know the rules on Airbnb or other short-term rentals

Owning a condo in a tourist destination could earn you big bucks on Airbnb or VRBO—simply you should check with the organization's rules about short-term rentals commencement, says Todd Maloof, a real manor agent in Hoboken, N.J.

"Buildings [may] have requirements that don't allow rentals shorter than six months, as that would fall within the hotel guidelines," he says. "Most of the smaller sized condo buildings—10 units or less—are by and large relaxed on their renting guidelines, simply yous should always be well versed in the event you lot practise decide to keep the home as an investment and not an owner-occupied property."

15. Understand the parking rules

Some condominium complexes include garages or covered parking spaces, but it'due south not always clear how many spaces are allotted to each resident. Bank check to see if there are company spaces, and to see whether there are designated spaces for owners, or if information technology'south a costless for all.

Sold on condos? Here's a handy buying a condo checklist:

Gear up to commencement looking at properties? Hither's a quick checklist of things y'all should make sure you do earlier buying a condo:

Get pre-approved for financing from a lender.
Find a real estate amanuensis who specializes in condominiums.
Empathize the rules on renting and pets, which can be establish in the condo's CCRs.
Check for special assessments/upcoming projects in the condo documents.
Practice a visual inspection of mutual areas.
Find out how much money the clan has in reserves for maintenance and upgrades.
Check if the condo is approved for FHA financing.
Understand how parking works in the complex.