CONDOMINIUMS: Pros and Cons
Condominium townhouses and apartments
offer home buyers an alternative to the
traditional single-family detached house. Is
a condo a good choice for you?
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What is a condo?
Condominium housing is typified by its multi-unit
design (townhouses or apartments) and its ownership
structure. A corporate entity, usually called the
condominium corporation, represents the joint ownership
of the individual unit owners. In other words, each
owner of each townhouse or apartment privately owns his
or her unit interior and collectively owns the common
elements. The common elements might include the grounds
and walkways around the complex, parking lots,
recreation facilities, and so on.
Should I buy a condo?
Buying a condominium townhouse or apartment requires
some thought about your lifestyle and long-term plans.
The following questions will help you to think about
whether or not a condo is for you.
The more "yes" answers you chose, the better suited
you are to condominium living. If you chose "no" to some
answers, think about what it is that you want from a
home. If your idea of home ownership includes a garden,
you’ll probably be dissatisfied with a condo. Perhaps
you’ll be happy with a townhouse that has a private
backyard. Or, if your present lifestyle is suited to a
one-bedroom condo but you plan to have children within
the next few years, perhaps you should consider
something that offers room to grow.
What are the major pros and cons of
condominiums?
| PROS |
CONS |
| Convenience:
Because the grounds and common elements are
usually maintained by the complex, you don’t
have to bother with mowing, cleaning leaves
out of the eavestroughs, or many other home
maintenance chores. You might also have
extra facilities such as a pool and tennis
courts that are also cared for by the
maintenance service. Of course, you must
still maintain the interior of your own
unit.
Maintenance and security services also
let you come and go with less worry about
your home. This is a plus for people who
travel a lot or who otherwise have busy
lifestyles. |
Loss of
choice and control: The same convenient
maintenance services also mean that you lose
your choices to landscape, garden, and
decide what the outside of your home will
look like. Many complexes even specify what
you can use for window coverings, (in order
to preserve a unified look on the outside).
Whether or not you like the landscaping, or
use the pool and other facilities, you must
still pay for them through your monthly
condominium fee. Also, if the condominium
corporation decides to do major repairs or
improvements to the complex, you might have
to pay an extra amount of money; sometimes
thousands of dollars. |
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Affordability: Except for luxury
condominiums (which are priced for their
features and location), many condos offer
more interior living space for the money. A
three-bedroom townhouse typically costs less
than a similar three-bedroom detached house.
Also, condos offer more choice of smaller
units (one-bedroom and two-bedroom) for
people who don’t need or want a full-sized
house. |
Less resale
value: Condominiums are more vulnerable
to downturns in the real estate market. They
are usually the first to drop and the last
to recover. Even in stable or hot markets,
condos tend to appreciate less than detached
houses with similar features. |
| Lifestyle
preferences: Some complexes are designed
for people with specific lifestyle
preferences. There are buildings for adults
without children, seniors, and so on. |
Limited
renovation options: The nature of
condominiums leaves little room to expand or
modify your unit. Many complexes forbid
interior modifications. Changes made to your
unit can affect the overall structure of the
building itself. Therefore, if your unit no
longer suits your needs, you must usually
sell and move. |
What should I look out for when buying a
condo?
In addition to all of the things you would check in a
non-condominium home (it’s location, condition,
features, etc.), you should also check:
The real estate agent and lawyer: It
can be beneficial to use a real estate agent and
lawyer who have experience with condominium
sales. Condominium transactions differ from
those of non-condo real estate.
The condominium management: Whether
the condominium is run by a property management
company or is self-managed by a group of owners,
the management will greatly affect your
satisfaction with the complex.
You can judge the management by looking at
the overall condition of the complex; (more on
that later). But the best way to check them out
is to visit several owners. Ask them how long
they have lived in the complex and if they have
been happy with the way it’s run. You might get
lots of happy recommendations or lots of horror
stories. Ask if there have been major repairs or
improvements within the past several years and
if so, did the owners have to pay extra for
them. Also, have the condominium fees increased
a lot each year or are they stable or at least,
staying with inflation.
The unit: Try to visit the unit you
are considering during hours when the neighbors
are at home. Listen for noise coming through the
shared walls, or if it’s an apartment, through
the ceiling. You should not hear everyday
activities in the neighboring units. A
well-constructed unit should be soundproofed
enough to shut out regular noise.
The condition of the complex: Don’t
limit yourself to just checking the condition of
your unit. Walk around the entire complex. Look
at the building exteriors, the lobby, the
grounds, parking garages, recreational
facilities, and so on. Everything should be
well-maintained. If you see signs of neglect,
look for another complex. Don’t invest in a
poorly run complex. You’ll be unhappy while you
live there and you’ll have difficulty selling
your unit.
Ownership structure: Find out what you
are buying. Typically, you will own the interior
of your unit, while the exterior - or common
elements will be collectively owned by you and
all of the other owners. Where it can sometimes
get confusing is with such things as parking
spaces and yards. In some complexes, you will
own your parking space(s) while in others, the
spaces are collectively owned but you have
exclusive use of an assigned space. In
townhouses, you might own the backyard but the
front yard is a common element, and so on. Your
lawyer or real estate agent should be able to
get this information for you. Or, you can ask
the condominium management for written specifics
about what is privately owned and what is
collectively owned.
Rules and bylaws: Each condominium
corporation has a written set of rules and
bylaws that govern the conduct of owners and
visitors while in the complex. Most are common
sense guidelines (such as rules about noise,
parking, etc.) to maintain peace and harmony.
However, some complexes go further. This is
especially the case with special lifestyle
complexes. For example: some might forbid or
restrict children and pets. You can get a copy
of the condominium bylaws from the management.
Check them to see if anything will conflict with
your lifestyle or long-term plans.
Condominium fees: Condominium owners
pay a monthly fee to cover such things as
maintenance and insurance of the common
elements, utilities, and other services. When
shopping for a condo, check the fee amount and
what it covers. (This should be included on the
feature sheet. Or, ask your agent or lawyer to
find out for you). Compare the amount of the fee
to that of similar condominium complexes. Some
complexes are more efficiently run that others
and therefore have lower fees. Also, try to
avoid complexes that include all utilities in
the fee. This is the most expensive way to pay
for utilities. That’s because the fee is set to
cover the most wasteful users. In other words,
you could be subsidizing the people who waste
electricity and heat. It is better for you if
each unit is individually metered and you can
pay your own utilities.
As a well-informed condominium buyer, you should get
a townhouse or apartment that will give you years of
satisfaction and a good return when you decide to buy.
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