5 Questions to Ask when Buying a Condo
Are you considering buying a condo? As with any property, buying a condominiumized property (whether in a high-rise or low-rise) comes with its own set of diligence that needs to be done. Your long-term enjoyment depends on how much work you’re willing to put in on the front end in order to mitigate future risks and problems. Sadly, many believe that a clean Certificate of Condo Health is all you need and it is your realtor or lawyer’s responsibility to take care of that while you pick out the colors. That assumption could not be more wrong. It is YOUR responsibility to ensure that you have done that extra 10% that is required to give yourself peace of mind. Here are just a few of the dozens of unconventional questions you should be getting answers to before you buy a condo:
- What are the overall demographics of the building occupants?
Knowing what type of community you are moving into and what their priorities will be is important on many levels. For instance, if you are moving in with a young family there will be inevitable noise and it is good to know whether your family will be compatible with the neighbors over the long term. Also, it may be important to you whether the building has and maintains a playground in the common area. Alternatively, if you are a young couple who enjoys entertaining friends (sometimes late into the night) it would be good for you to know whether you will be considered a nuisance and get reprimanded by the Condo board or if they would happily want to join in on the party. Obviously the building choice is important, but just as important in a condo situation is the make-up of the community.
- How functional is the condo board?
When living in a condominiumized property you are, in essence, living in a fiefdom run by a board and its President. Now, in most cases, it is a benevolent fiefdom where the leadership is devoted to the good of the building and its owners. However, there are situations where the condo board can go rogue. Of course, you will be told that all is good but before you remove the conditions you should do two things:
- Meet the president of the board for coffee. Discuss with them and see if you are compatible with the community philosophy.
- Read each line of the last two years of the condo board minutes. Look for any issues that look like they are being delayed, as well as any continued conflicts or disputes.
You are looking to see how the building is run on a day-to-day basis. In essence, you are looking to see whether the board meets regularly and whether they are a functional or dysfunctional group who are running your future home.
- What is the dispute resolution process
Hopefully you will never need to deal with a dispute while living in your condo. However, you do need to know how your community deals with disputes amongst owners if a problem escalates. Unfortunately sometimes within any community, condo or not, there are bad neighbors who have zero regards for their fellow human beings. This can be a bigger issue in a close-living condo. You will want to know if you are stuck in a bad situation how your community deals with conflicts. Is there a resolution process in place and most importantly how effective is it? Issues over parking, noise, trash, smell, etc. all become heightened when you have so many people living in tight quarters. It is best to go in with your eyes open.
- Insurance coverage ? Can you afford NOT to?
It is critical that you know what the condo insurance policy covers and what your deductible will be if there is an issue that you cause, which affects the building. It’s also important that any insurance disputes are dealt with quickly and efficiently so you can continue with your business as soon as possible. You will want to know whether you’re covered for living expenses if your suite becomes uninhabitable due to owner negligence (i.e., the bathtub above your unit overflowing). Condo corporation’s insurance coverage differs from building to building and can vary widely. It helps to review your current corporate insurance policy to see if there are items not covered by your insurance. If you find gaps in the policy, you need to look for extra protection to ensure that your condo is covered. It’s cheap insurance, but it can save your financial well-being in the long run. If you are looking for condo insurance, you can check out somewhere like BST Insurance Brokers to learn more.
- What is the ratio of owner-occupied to investor/rentals?
Whether you’re going to live in the condo or use it as a rental property this is something you will need to know. If you are going to live there, you are looking for a low percentage of rentals in the building for a number of reasons:
- Condo budget, maintenance, fees, and policy decisions can differ spectacularly between boards of homeowners vs boards of investors.
- There is generally less wear and tear in a building with high percentage of homeowners due to a limited number of move-ins and move-outs.
At the Real Estate Investment Network we want every one of your real estate investments to be a successful one. We cannot stress enough how much it matters to do your due diligence and ask these types of questions, and more, when buying any property condos included. Asking these questions will give you the peace of mind you deserve as you move into your new home or gain your new rental property. Whatever property you are looking into buying, you need to feel confident with the real estate agent you are using, researching companies like jimgarciahomes.com to see what they are like and what they can offer you, will save you time and get you closer to your home goals.
To your success,
Don R Campbell
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