By One of the classic trade-offs in real estate is the choice between a single family house with a longer commute versus a more centrally-located condo or townhome. If you decide to go for the condo or townhome – here are 9 critical items to consider when considering a purchase:
- Homeowners Dues – are they too high? too low? High dues (in comparison to other similar properties in the area) could reduce your purchasing power and may indicate that the complex is playing “catch up” on deferred maintenance. Unusually low dues may indicate that the association is under-budgeting for future maintenance and repairs – potentially resulting in a future “special” assessment.
- HOA Financial Analysis – how are the budget and cash reserves for the Homeowner Association (HOA)? Are there any special assessments in the recent past or in the near future?
- HOA Documents – Carefully review the documents governing the Homeowners Association – including the CC&R’s (Covenants, Conditions & Restrictions) as well as less formal documents like newsletters. Consider hiring a real estate attorney to review these documents. Newsletters may indicate potential issues that could become litigation or special assessments in the future.
- Exterior condition – do you like what the outside of the complex looks like? If the landscaping, parking lot, or pool looks like a “fixer upper” – it may not be easy to convince your new neighbors to agree and fund the changes.
- Parking – how’s the parking in the complex – not only for you – but also for your guests? If guest parking is limited to “street parking” – check out its availability at a peak “at home” times like Sunday evenings.
- Floor plan – does the layout of the condo work for you? Unlike a single family home – you won’t be able to “bump out” the dining room 4 feet to make room for Grandma’s china hutch.
- Who are Your Neighbors? Two vital stats that may affect your ability to get financing are the percentage of owner occupants in the complex as well as the number of units in foreclosure.
- Size of the Complex – Is the complex too small, too big, or just right? This is a matter of personal taste. Very small complexes with only a few units may demand more of your time and money to manage. Very large complexes may feel impersonal, be more complex to manage, and always seem to have several competing properties on the market (which may affect your future resale).
- Location, Location, Location – and finally – where is the condo or townhouse located? Consider both the macro location – where in the Bay Area do you want to live – as well as the specific location of a given complex (commuter route, shopping nearby, schools).
