What are the pros and cons of Condominium ownership?
The cons of condo ownership are in 3 major categories. The Condo’s finances, its HOA and any legal problems should be the focus of the buyer’s investigation of the property. The insights into the Condo’s finances and the HOA rules will be the big determiner if the property is a good fit for you to buy.
The pros of the condominium will create the desire to own the property. The condo’s amenities, facilities, maintenance issues, upkeep, and affordability all craft a strong value for owning a condo.
The commitment to buy a condominium is how you off set the condo’s cons with all the pros of ownership.
A real estate definition of condominium:
CONDOMINIUM — An estate in real property wherein there is an undivided interest in common in a portion of real property coupled with a separate interest in space called a unit, the boundaries of which are described on a recorded final map, parcel map or condominium plan. The areas within the boundaries may be filled with air, earth, or water or any combination and need not be attached to land except by easements for access and support.
How do condos work?
A condominium is both individual owned and common interest owned. There are parts of the property owned individually, many times called units. There are parts of the property owned in common with all the other owners.
A condominium, also known as a condo, is a residential building with multiple individual units which share walls and shared spaces. Each tenant separately owns an individual unit. A condo community relies heavily on the financial contributions of its residents to keep things running smoothly.
The homeowners’ association, cooperative board or condo association collects assessments (money) from the owners and pays for upkeep, insurance, maintenance and reserves for replacement of improvements in the common area.
The costs to own a condo include HOA Fees along with mortgage and property taxes, and standard home owner bill. Homeowners association fees (HOA fees) are monthly dues that go toward community amenities, building maintenance, cleaning services for common areas, upkeep of laundry facilities, and more.
Due diligence is needed in the investigation stage of purchasing a Sacramento condo. There are sets of rules condo owners have to abide by called the Declaration of Covenants, Conditions, & Restrictions (CC&R). Condos are typically inexpensive compared with single-family homes, making them able to afford for first-time buyers, retirees, and investors.
Due diligence is a process that serves to confirm all material facts in regards to a sale. When considering a condominium, the common area uses is a very important thing to understand. Do not assume. Check out the details in each condo that is under consideration.
When you own a condo, your homeowners insurance only needs to cover the inside of your home, as your monthly HOA fees will help insure the building or complex you’re in. But it is best to check with a professional insurance agent to get the full details. The condo insurance may not have high enough liability limits for you. This is another due diligence area for you to investigate.
The pros of the condo ownership
The pros of the condo will build the aspiration to own the condominium. First, view the pros of the condo with the eye of how they will enhance your quality of life. Owning a condo can be a viable alternative to renting an apartment. The added benefit to condo owner is that you can build equity and often take advantage of tax deductions on the mortgage interest.
But second, consider how they will add value to the property. Most likely there will come a time to sell your Sacramento condo and you want the benefits of ownership to add value to the property.
- One major pro of buying a condominium is affordability.
- Condos are often priced lower than single-family homes.
- Condos can be a great first investment property or first home.
- Veterans can use a VA loan to buy a condo for their primary home.
- Another big benefit of owning a condo is the condominium association takes care of the maintenance and repairs. They cut the grass and maintain the grounds; they fix the roof and many more upkeep issues.
- Use of the common areas should be for all residents. Common areas may include recreation facilities, outdoor space, parking, landscaping, fences, laundry rooms and all other jointly used space. Condos in Placer County have quality of life issues like close to outdoor living.
- Another compelling reason to own a condo is access to amenities. Many condo communities offer residents facilities that are out of reach for the average homeowner.
- A pool that the association maintains is a great benefit to condo life.
- Some condos have a fitness center, tennis courts, swimming pools and clubhouses.
- Some condos offer security which could be another benefit of condo ownership. Many condos have gated or locked entries, doormen, or even security professionals patrolling the property. Some areas in the Sacramento real estate market this is a very important pro.
Condominium Individually Owned Within a Common Facility
The cons of the condo ownership
The 3 biggest Cons of buying a condo property are the Condo’s finances, its HOA and any legal problems. Understand these issues before you buy a condominium.
1. The Condo’s finances
Due diligence in the financials of a condo is a very different issue when buying a home or investment. Not taking the time to check for your self could be a big surprise in the future of a major bill or legal problem. There are also some downsides you may need to consider when buying a condo in Sacramento.
Owning condo property costs money. Understand the cost of HOA fees and any other payments or fees the condominium expects. Know what the money pays for and does not pay. These can save many headaches in the future.
Research the condo’s finances and the rules the condo organization has for investment property buyers. Many associations do not allow rentals or severely limit the number of units that may be rented.
The reasons why there is a limit on units the condo can rent is if too great a percentage of the total units are rentals, the condo can lose FHA and conforming eligibility, which makes financing very difficult.
2. The condo’s homeowners association (HOA)
A homeowners association (HOA) is an association of the property. Another unique feature of condo living is that most condos will have a governing board that oversees how the condominium community operates and is maintained. Some homeowners associations can be very restrictive about what members/home owners can do with their properties. How restrictive are HOA’s? Find out before you buy.
3. The e condominium’s legal situation
Legal problems come in many different forms. A quick search of Google showed over 18 million returns. Make sure to find if there are any legal issue the condominium is dealing with before you close the transaction to buy a condo.
Final thought about buying a condo
A Coffee professional real estate agent is a great choice when considering buying or selling a condo. We can make a very big difference. Condos are not like single family homes. They have many more rules and financial issues to understand. There are also condo fees to understand when getting a property loan. These can sometime push a qualified buyer out of qualifying for a condo loan. Condos can be a residential investment if the HOA is ok with rental property.
Remember condos are a residential real estate building. Do all the inspections that would be done on any home. The basic home buying process is needed when buying a condo.
Coffee Real Estate agents can help you navigate the condo process. Knowledge is power. Have the power on your side with Coffee Real Estate professional agents.
Coffee Real Estate offers both a wholesale and retail way to sell your Condominium.
Retail is the way to maximize the value of your home. Coffee Real Estate finds a retail buyer willing to pay full retail for your property. We use successful real estate marketing to present your house to its full value. Learn more about Selling Your Home for the Max Value in Condominium.
Wholesale is the selling price of your home for cash in “as is” condition. No Repairs, Sell As-Is, No Closing Costs, Leave Any Unwanted Items Behind, No Cleaning or Showings, Just CASH as soon as next week. Learn more about getting a CASH Offer on your Condominium property.
Let’s talk about which way is the best for you.
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How to begin looking for a condo can create problems. Each person has their own priority of what is important. For some it is where to buy a condominium in Sacramento or in Placer County. Others, it is the must haves of the house the wants, needs and must have list. Coffee Real Estate works with home buyers to find the right home for them. Let’s begin the process today.
