Friday, April 10, 2015 / by Steven Annth
You have discovered that your current house is much too large for you. You are strongly considering downsizing to a condominium. But is this a good investment idea for yourself? Are there any unusual fees associated with buying a condo that you ought to know about? We will attempt to answer those questions (and more) in this article.
Whether or not a condo is a good investment for you depends on a few factors. One is the price of the unit in comparison to other similar properties in the same area. Another is the current real estate market; in particular as it relates to condo sales. If you buy a condo when the real estate market for condos is booming, you will pay a much higher price for it. Then if you have to sell it later on and the market has tanked you will likely have to sell it for considerably less money than you paid for it. That is obviously NOT a good scenario for you. One downside associated with condo investing is that if other units in the same complex become foreclosures; even if YOURS does NOT, the value of YOUR unit will still go down. No; this is not fair, but unfortunately it is a fact that you must be aware of.
Another factor involved in determining if investing in a condo is a good idea is the specific complex itself. Where is it located, the value of other condos in that complex, its proximity to shopping centers and employment opportunities. Also whether or not that particular complex is well=maintained and has a great reputation for resident-HOA relationships. If the complex HOA board is known for being difficult to deal with you may well want to avoid buying a condo there. Instead, move onto another complex where the relationship between the residents and HOA board is much better. You WILL be able to find such places. You DO NOT have to put up with unnecessary difficulties.
Some reasons you might want to avoid investing in a condo instead of a smaller house have more to do with the complex Board of Trustees (the HOA we just spoke about.) Some of them have some rather ridiculous by-laws that you MUST obey. They can include forbidding non-married couples living together in their complex. Others have strict policies against renting out your condo to other people. In any dispute the HOA has power and you DO NOT. So if they decide they want to impose a fine on you there is nothing you can do about it. Then if you do not pay their fine, they can put a lien on your unit and/or even foreclose on it.
Then what happens if you have difficult neighbors. It is possible you will have nice neighbors, but not necessarily a fact. In most condo complexes there is a mixture. Some neighbors are nice while others will complain about everything in sight. Not only can they make your life a nightmare, but if you want to sell it or rent it, they can be a huge deterrent. Be sure to check out your condo complex neighbors before you invest in a unit there.