The condo market offers excellent opportunities right now for savvy buyers, because there seems to be more inventory than interested purchasers. This is particularly true for condos located in larger buildings and high rises—not so much for units in smaller buildings with access to outdoor space. Those are still popular and go into contract more quickly.
It’s important to consider the complexity of owning this type of property, before you rush out to look at different possibilities.
Here’s a quick primer that will help you evaluate the fundamentals of a condo and its homeowners association (HOA).
Make sure you review:
HOA dues: How much are your monthly HOA dues, and what do they cover? Is the total amount in line with buildings of the same scope? Are there any unit owners who are behind on their HOA dues?
HOA reserves: How much does the HOA have on hand in the event a major component of the building needs to be replaced?
Rental capability: What is the restriction on renting your unit, should you decide to move and not want to sell? And how many units in the building are rented?
Affordable housing designations: Is unit resale restricted by any city ordinances, such as affordable housing laws?
Pending litigation: Is the HOA involved in any lawsuits?
Special Assessments: Will there be any future, per-unit charges in addition to the existing HOA dues?
Parking: Is the parking space deeded to the unit, or is it leased separately? Are you able to rent your parking space in the event you want to? Will your car fit in the space?
Pets: What are the number or pound restrictions for pets in each unit? What restrictions exist for pets off leash?
Insurance: Is the insurance policy current? Does it include earthquake insurance? (You’ll know if the HOA dues are substantially higher than usual.)
Renovations: What’s the process required for remodeling any part of your unit? Similarly, did the previous owner complete any renovations, and did the owners obtain the necessary permits?
Available Services: Is there a lobby attendant? Fitness center? Common garden or roof deck? HOA lounge? Check out every aspect of the building—even the trash and recycling room.
Move-out Fees: Is there a fee for moving in, and what days/timeframes does the HOA permit moves to take place?