Condo buying advice

So, I’m starting to think about buying: I don’t foresee myself moving in the near future and rent has gotten ridiculous in Atlanta. My budget combined with my preferred areas to live in don’t necessarily allow for buying a house. I could increase my commute significantly and find a house, but I don’t want to do that. I’ve done the long commute in this town before and they are miserable for me. I also don’t particularly want a yard that I have to deal with. So I’m considering condos as an option, looking carefully at particular parts of town that are likely to have better resale value OR be good options for renting should I move at some point in the future.

Saturday my agent took me to see some, but I have questions that I’d like to hear opinions on from people not involved in my potential buying process.

So, if you’ve bought a condo - or even if you’ve considered buying one and rejected the idea* - I’d like your thoughts.

[ul]
[li]Would you buy the same place again? [/li][li]What should I consider around the HOA? Are there questions I should ask about that?[/li][li]What do you like about condo living? What do you dislike?[/li][li]If you considered condos and rejected them, why? [/li][li] What do you wish you had known/asked before you bought your condo? [/li][/ul]

*I’m not opposed to answers to these questions from people who’ve bought other types of real estate, but if you’ve only ever bought houses and think condos are a blight upon the market, then let me know that so at least I can view your responses with knowing about your particular bias. :slight_smile:

I’ve owned a condo in the DC area for ~3 years. Before that I owned a condo in Connecticut for a few years in the mid-2000s.

My current condo, yes. The CT condo, no, because I barely broke even when I sold it due to the housing collapse (purchased in '04, sold in '07 after reducing the price by 40K).

How much is the HOA, what services do they provide, what do they cover/own, etc. If you can, try and talk to an owner (or a few) in the building to see what they think about the HOA and the community in general.

I like not having to take care of the outside of my home (the building is responsible for the outside). I like that there’s someone in the building who can open the door for maintenance people while we’re at work. I like the pool, fitness room, and tennis court. I like parking in an underground garage. I like having a few friends in the building.

I dislike not having a yard (mainly because I want dogs). I dislike that the condo (2BR, 2 BA) is probably too small for a family once my wife and I decide to have kids.

I currently live in a condo (for about three years). Prior to that I owned a house for 17 years. Here are a few things you want to know;

[ul]
[li]What is the financial situation of the association? Since you are likely going to get a mortgage, the bank will look closely at that, but it might be nice to know before you get to this point (banks will not give mortgages for condos where the financials are not good). Let your lawyer review the annual financial statement and do not use a lawyer referred to you by your agent. Pay close attention to the capital reserve account. Typically banks want to see 10% operating budget placed in the capital reserve (on a yearly basis). When condo associations are in trouble, they will typically ignore the capital reserve account or even raid it for operating funds (a big red flag).[/li][li]How many units are rented out? I prefer a condo where most of the units are owner occupied and so do many banks. The company that is managing the condo should be able to give you this information.[/li][li]What is the construction between floors? Is it concrete or just wood framing (this is not a deal breaker, but the concrete is preferred).[/li][li]What is the parking situation? (the banks don’t care about this, but you will).[/li][li]Why is the current owner selling and how long have they been there? Are they selling a loss? This would make me suspicious that they are fleeing a bad situation.[/li][/ul]

You will hear your neighbors and you will be living in a more communal situation. People who have lived in houses don’t always appreciate this.

**Would you buy the same place again? **
I think I would, but not from the same realtor. It turned out that one of his partners had bought and flipped the place, to me through him, at a very large markup. But this was the first time I had ever bought any property, let alone a condo, and I know a lot more about the process now than I did then.

**What should I consider around the HOA? Are there questions I should ask about that? **
The problem with HOAs is that they can be taken over very rapidly by crazy people, who will then change all kinds of bylaws to suit themselves. What I would look for is a … constitution? … that limits changes by mandating a majority vote among ALL owners, not just the ones who show up at a given meeting, or one where the elected officers can change rules without approval from the rest of the members.

**What do you like about condo living? What do you dislike? **
No outdoor work, including shoveling in winter! I’ve had my bathroom ceiling start to collapse because of a leak from the unit above mine.
**If you considered condos and rejected them, why? **
N/A
**What do you wish you had known/asked before you bought your condo? **
I wish I knew how to look up the prices the last people paid for the same property and how long ago. I wish I had better understood that both realtors in a dea are in reality working for the seller rather and one working for me. I wish I had signed a buyer’s agreement with a realtor to force some more liability on the agent if he failed to protect my interests.

This is all very helpful ethelbert and iiandyiiii, and absolutely include some things I wouldn’t think of!

Neighbors and more communal living isn’t an issue - I’ve been in apartment complexes since 1996 and I’m not sure that anyone could be more intrusive than my current downstairs neighbor (though I wouldn’t bet on that because I’m sure I’d lose).

I’ve lived in condos ever since I bought my first place (decades ago). Luckily, I’ve never run into the HOA from hell that some people report.

One important thing to find out: is there a lawsuit or any type of litigation against the HOA now? Has there ever been in the past? How was it resolved? Buying a condo whose HOA currently has a lawsuit against it is a REALLY BAD IDEA. I’ve backed out of purchase agreements when I found out there was a lawsuit. Buying a condo in a complex like that is buying someone else’s problem – not anything you want to do.

If there is a lawsuit, and the plaintiff wins, all members of the HOA (you!) may be liable for a chunk of change.

J.

When we first came to this area, we were looking at condos, altho we eventually got a house on a large lot. Turns out it was a good thing we avoided the one condo community - within a year or two of when we would have bought, they had a major assessment (several thousand dollars per resident) to replace the roofing and siding on all of the buildings. For whatever reason, they didn’t have enough set aside to do the repairs.

I’m not sure if we could have found out about that, but it’s probably along the lines of the suggestion to investigate the association’s financials.

The other thing that put us off these particular condos was the general condition of the units we toured. One had tile curling up in the kitchen. Another had sloping floors - enough that it could be seen and a cylinder placed on the floor accelerated significantly as it rolled. An independent inspector is a must - actually any property you might want to purchase should be inspected by a qualified professional.

The main reason we opted out of a condo was our desire for a garage/workshop. The only way we could get that was in a stand-alone house. But as we age and maintaining the house becomes too much, we might look at condos again.

I am not sure this is that big a deal. Most lawsuits never make it to trial and unless the problem was due to criminal activity on the part of the HOA (unlikely), insurance will pay it. If the lawsuit is the result of chronic neglect on the part of the HOA, then yes, you don’t want to buy there (because of the chronic neglect, not the lawsuit).

Once you are an owner, you should at least attend the annual meeting. It is amazing how few owners attend those meetings. Ask questions. Make friends. Be involved.

Here’s a recent thread on a closely-allied topic with some good info: Pros and cons of condo ownership in retirement - In My Humble Opinion - Straight Dope Message Board

There is a condo association in VA where a suit was filed over political posters in the yard (rather, about the measures the HOA used to try to stop it) that ended up bankrupting the HOA. Here’s a thread I did about it.

Our first place together was a condo. Now we’re in a house. The answers are for the condo.

Would you buy the same place again?

Absolutely. It was a good HOA, the townhouse common walls had sound baffles, the view out the front window was spectacular, and we had nice green common areas.

What should I consider around the HOA? Are there questions I should ask about that?

Try to find residents to talk to about the HOA. Get a copy of the bylaws and read it carefully. Ditto comments about the finances. I’d try to find out what their long-term repair project schedule is. Ours had roofs, driveways, etc., all scheduled out with the associated estimated cost. I’ve never heard of an HOA that had the freedom to change bylaws because they felt like it, or without a vote of the entire membership. It’s just too easy to be sued by property owners for that sort of action. You signed an agreement; if it’s going to be changed, you have the right to have a say in it.

What do you like about condo living? What do you dislike?

The usual. There is always an element that is nosy about your business, or that believes their voice is more important than yours.

If you considered condos and rejected them, why?

We rejected some that we were shown because of dated structures, thin walls, etc. I refuse to live below somebody, so that limited things.

What do you wish you had known/asked before you bought your condo?

Nothing; we’re pretty thorough.

One thing to keep in mind is that if the utilities need to be upgraded, or the sidewalks/streets, you could be on the receiving end of a special assessment by the city to pay for it.

After reading more answers, I realized there is something else you need to find out: How are the HOA’s reserves? The HOA should be putting away money to cover the costs of “major” items that they are responsible for: roofs, fences, painting, siding, pool upkeep, etc. Each one of these items should have a “lifetime” attached to it, and there should be an amount currently set aside to cover its future replacement / repair.

If the HOA financial statements DON’T have these items listed and funded (pro rata), look into it more closely. This is the type of situation in which large special assessments pop up.

J.

I know nothing of your situation so I ask - do you plan to have a family any time soon? I ask because the only people I’ve known to have condos moved out as soon as they could when they had kids because it just wasn’t ideal.

Well, two moved out ASAP and then had double mortgages for a while because the condo couldn’t sell. One of them still has their damn condo.

The other couple can’t afford to move out of their condo because they’re upside-down. No one will pay what they owe. They would have moved 5 years ago when the first kid came, if they could. Now there’s 4 of them stuffed in there.

Condos to me always seemed best suited for post-kid couples and childless couples, or single people maybe with a visiting kid.

None of my friends with condos ever expressed a problem with their HOA, fwiw.

Thanks, all. This has been super helpful.

** ZipperJJ**, that’s not a concern. I’ve never wanted kids and at 41 I’m old enough that I have no expectation of changing my mind. (But thank you for pointing that out - because it is an important consideration for some people considering such a move).

I’ll chime based on the experiences of two good friends with condos. Both had experiences relating to large assessments.

The first one was disclosed as needed, but not the full cost. It related to asbestos abatement in the development. The HOA did not put aside money for the project, so each owner was hit with a bill.

The second was living in a building that had been apartments that were converted to condos in SF. It was an older building. She woke up one day to the sound of water running through the walls. Her pipes failed. Her downstairs neighbor suffered extensive damage. Their insurance companies bickered before turning around and blaming it on the HOA. And the HOA decided that the pipes in the entire building needed to be replaced. So every owner got hit with a massive, and unplanned, bill.

For older buildings I would definitely have an inspector you trust crawl around, and ask lots of questions about planned work. Make sure there’s a large rainy day fund. I think a well run HOA can make your life easier. A poorly run HOA will make your life hell.

If it is a converted apartment (is this still being done?), If it wasn’t very high-end apartments, look out for noise - often, the only thing between your bedroom and the one next door is a single 2x4 and 1/2" sheetrock wall. You will hear each other. If you can’t be quiet, at least be entertaining…

Re. the SF flat - was there no professional inspection done? At the very least, you find the water shut-off and look for an immediate adaption to copper. And find the electrical service and see fuses vs circuit breakers and knob & tube vs romex.

[ul]
[li]Would I buy a condo again? Yes. Would I buy this particular condo again? Probably maybe?[/li]
I love my place. But there are a few things about it that I’d change if I could (e.g., I have no outdoor space, not even a Juliet balcony. I hadn’t had that in my apartments, so I didn’t think I’d want it in a condo. Now, years later, there are times where I think it would be nice to be able to grow a plant outside.) There are a few other things like that - didn’t care about them when I bought, now I’ve changed.

[li]If you can go by the building and meet people who live there, ask them what they think about their HOA. Otherwise, you’ll get a chance to look at their documents, including the agreement and the finances. You’ll want to see what they cover and what your responsibilities are. I am a little wary of brand new buildings. Partially because I’ve heard horror stories that I didn’t have to deal with in a building that has had time for the issues with the structure to have been found and fixed, and time for the HOA board to figure out what it’s doing, build a reserve, and be more or less functional. (not to say my HOA is perfect, but it doesn’t do a bad job)[/li]
[li]I like that I do not have to deal with some of the issues of home ownership. I don’t have to take care of a lawn or garden. That’s done. I don’t have to worry about building upkeep and repairs. That’s also done and when more repairs are needed, the reserves are enough to cover necessary maintenance.[/li]There are times that I don’t like sharing walls with other people, but for the most part it isn’t an issue. I also have a dog, it would be nice to just open the door and let her out into the backyard, but it’s probably good for me that I have to take her on walks.

[li]N/A[/li]
[li]I bought in 2007, so I wish I’d known how much the housing market was about to collapse. I wish I had known more about buying a house altogether. A lot of it was really confusing until after it was all over. But those aren’t condo-specific things.[/li][/ul]

A brand new development will NOT have HOA dues set realistically, at least not in CA.
Until X% of the units are sold, the developer pays for the HOA. Guess how much they are going to charge themselves?

I knew a woman who had a top floor unit ia a reasonable nice building.

Then there was heavy rain and water was pouring in.

The flashing had been installed top-down instead of bottom up.

I’ll try a diagram



       /           vs                /
     /                                /

Which way dumps the water ONTO the lower section,, and which dumps it UNDER it?


?

I’ve owned a couple, all very different, but things to check:

[ul]
[li]Percentage of rentals vs owner-occupied (i.e. transient people who may not take care of the common areas)[/li][li]Percent in foreclosure (i.e. they are not paying their condo dues)[/li][li]Last date for replacement of roof and anything else in the shared infrastructure[/li][li]Liens (someone already mentioned this)[/li][li]Look at the budget and how much is in the reserve fund.[/li][/ul]

Plus all the usual things, what’s the zoning, is there a toxic waste dump next door, etc.

I have never lived in a condo, but I am thinking about it.
Con: Nutty HOA, possible sudden unexpected bills (my wife’s hairdresser got hit with a tripling of her fire insurance cost after another owner had a fire) and all the usual things.
Pro: No one has mentioned the tax advantages. If I sell my house and invest the money in anything but a condo, I pay tax on the proceeds. If I put it into housing it is earning my rent tax free. At my age, I want someone else responsible for maintenance, snow clearance, etc.