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Free Reports
What Are The Disadvantages of Condominium
Ownership?
For some homebuyers, condominiums are a godsend. They
provide a means of building equity without the hassles of yard work and other
outdoor maintenance projects, as well as many of the indoor chores and financial
responsibilities that single-family homeowners typically face.
But condo
ownership isn't for everyone. And before you sign on the dotted line and enter
into this agreement of communal ownership -- which is exactly what you're doing
when you purchase a condominium -- you'll need to consider a few factors first.
Not to burst your bubble, of course, but life in a condo brings with it a few
hassles with which single-family homeowners feel grateful they don't have to
contend.
For starters, as we alluded to last week in a related article,
condominium owners share common walls. How many common walls you share depends
upon whether you purchase a flat (meaning you have a neighbor living either
underneath you or above you, as well as on one or both sides of your unit) or a
town home (which you gives you the reassurance that both upstairs and downstairs
are yours -- although some high-rise-style town homes are built in a manner in
which residents may still have neighbors living either above or below their own
units).
Common walls are reminiscent of apartment life, which is
something that homebuyers often are anxious to flee when they've reached the
life stage at which a home purchase is attainable. If you have quiet and
considerate neighbors, common walls become a non-issue. But it's a game of
Russian roulette when you sign on the dotted line. You have no idea how
considerate those neighbors will be until you spend your first night in that
unit you're considering. And unfortunately, if your neighbors are obnoxious, you
have little recourse as a condominium owner but to call the police.
Unlike apartment communities, in which renters may often pick up the
phone and call a leasing office or an on-call security staff to report excessive
noise, condominium owners have no such protection. They're faced with the sticky
dilemma of going downstairs, upstairs or next door and democratically working
out the problem neighbor to neighbor (which, let's face it, isn't easy to muster
up the courage to do -- particularly if you're new to the condominium community)
or calling the police. That's quite a way to introduce yourself to your new
neighbors if they determine who blew the whistle on their late-night revelries.
Aside from the common wall issue, you'll also need to consider that if
your local real estate market experiences a downturn, condominiums usually are
the first casualties in those sagging economic times. Condominiums sometimes are
pigeonholed into a "niche" market, and when the real estate market slows to a
trickle, the few transactions taking place usually involve single-family homes.
And of course, during slow periods, asking prices for single-family homes drop,
making it possible for many aspiring homebuyers who previously thought a
condominium was the maximum they could afford to move up to a single-family
home, instead.
Then, of course, there's the entire issue of the
condominium association. Their effectiveness and cost varies greatly from
property to property. In a single-family home, you'll never be presented with a
sudden fee that you must pay for communal property repairs. Take the case of a
condo owner with whom I recently spoke, who told me her condo association
recently informed her that, in order to pay for roof repairs to the entire
complex -- her building included -- she and every fellow condominium owner in
her development would have to cough up $650 on the double. That was in addition
to her $120 monthly condo association fees -- and, of course, her mortgage.
A condominium association, in theory, is an excellent insurance policy
for the continued maintenance of your exterior property -- not to mention a
protection for keeping the property values high. On occasion, however, these
associations become quite political, governing everything from the Christmas
lights you string on your porch to whether or not you can keep a 50-pound dog in
your unit. This communal lifestyle holds you accountable to a mini government of
sorts. As an owner, you may, of course, make your views heard during monthly
meetings, but there's no guarantee as to whether or not you'll be successful and
affect change.
If you're informed about all of your obligations as a
condominium owner before you sign the contract and are agreeable to them, you
just may have found yourself the home you've always wanted. As with every major
financial commitment, you'll have to weigh the pros and cons of the agreement
you're preparing to enter. Perhaps the most important thing to remember as you
make your decision is to take your time. Demand full disclosure of condo
association fees and exactly what they cover. Know up front what your monthly
expenses are expected to be; it can vary considerably among different
condominium developments. Shop around, and get some perspective on how different
properties approach their residents. Ask your REALTORŪ if he or she has sold
units in this development before, and what kind of feedback he/she has gotten
from his clients after they moved in. If your Realtor hasn't conducted a
transaction at this development, ask him/her to call fellow Realtors and find
out if they've sold units at the condominium complex you're eyeing. First-hand
reports are invaluable tools during your home search process, and you'd be wise
to take them to heart.
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