Condominiums are a great option when you are looking for minimal maintenance compared to a single-family home. They typically have many amenities such as gyms, pools, and saunas on-site and just moments away from your front door. Many condominiums offer concierge services that can assist with day-to-day needs such as grocery or dry-cleaning delivery. They may also make dining recommendations, schedule dinner reservations or coordinate activities such as boating, sightseeing, and transportation needs.
There are a few things that will want to ask your realtor about the condominium complex before you make purchase offer.
- What are the monthly homeowner’s association (HOA) dues? This is important to know as it impacts your budget
- What is the typical percentage of increase of HOA dues historically? You will want to know this since it will have affect your future payments
- Does the condominium HOA have 10% of their annual operating budget in reserves? This should be yes for two reasons. The first is that the condominium HOA should have a reserve that can maintain and repair any issues within the entire condominium project and amenities. The second reason is that mortgage lenders will require this to meet their guideline requirements.
- Is the condominium HOA named as a defendant in any litigation? This question is simply asking if the condominium project is being sued. If a condominium project is involved in litigation as a defendant, this could point to HOA mismanagement, possible structural issues, or other underlying issues.
- If you are purchasing a condominium as a primary residence or second home, you will want to know the percentage of owner occupants and second homes versus those that are renting. Typically, mortgage lender requirements are that 50% of the units are owner occupied or second homes.
- When purchasing a condominium for investment rental purposes, ask your realtor does the condominium HOA allow for daily, weekly, monthly, and annual rentals? This should be yes to ensure investment income cash flows.
After you have spoken to your realtor about your ideal condominium, feel free to contact us so that we can move forward with your mortgage financing and guide you through the process.
