If a single-family house isn’t in your budget, you might be thinking about purchasing a condominium. The monthly mortgage payments for a condo are often lower than those for a house, but owners of condominiums must pay additional fees and abide by rules.
What You Should Know About Living in a Condo
A condominium complex is governed by an association that sets and enforces rules and provides services for the community. Rules can cover pets, the number of cars that residents may park on the property, when and where they may host gatherings, and other issues.
The association typically handles maintenance for common areas. That can include painting the building’s exterior, maintaining the landscaping and removing snow. In addition, condos generally provide amenities that only residents and their guests are allowed to utilize, such as a pool, gym and tennis courts.
Owners of condos are regularly assessed fees to cover maintenance and repairs. Fees can vary widely from one complex to another, and different owners who live in the same complex might pay different amounts, depending on the sizes of their respective units.
The board can also use special assessments to cover the cost of major projects and unanticipated repairs, such as repaving the parking lot or replacing the roof after a storm. Special assessments aren’t levied on a regular basis, and the amounts that are charged can vary widely, depending on what needs to be done.
If you own a condo and you don’t follow the rules, or if you fall behind on your regular dues or don’t pay a special assessment, you can be required to pay a fine. If you don’t catch up on payments, the condo association can place a lien on your property. You might even lose your home in foreclosure.
How to Figure Out If Buying a Condo Is Right for You
A condo’s list price might make it seem more appealing than a single-family house, but with any property, you need to consider the total cost of ownership. Dues can add hundreds of dollars per month to your housing costs, and special assessments can be devastating if you’re not setting aside money for them on a regular basis. If you don’t keep up with the required payments and you get fined, your financial situation can quickly get even worse.
Think about whether you would take advantage of the amenities that a condo complex offers. It might not make sense to pay dues that will cover, among other things, a pool and tennis courts that you’ll never use.
Before you decide whether to buy a condominium, request the most up-to-date information available about rules, fees and fines. Find out how often residents have been charged special assessments in the past several years and how much those bills were. Once you understand the financial costs and restrictions, you’ll be able to make an informed decision.
