Buying a condo provides many of the benefits of buying a home and eliminates some of the drawbacks. You own the space, so you have the privacy and financial benefits of owning a home. However, you are not responsible for all the maintenance involved in home ownership. For many people, purchasing a condo makes good sense.
Before you decide to move forward with a condo purchase, you will want to make sure you understand all the fees and rules involved in buying into that condo association. Here are five questions to ask before you buy a condo.
What are the HOA fees, and how often do these fees go up?
The homeowners’ association (HOA) is the group that maintains the shared areas of a condominium building. When you buy a condo, you pay monthly HOA fees to help keep up your building. In Denver, HOA fees range around $200 to $400 a month, but the nicer the building, the more you will pay in HOA fees.
More than finding out the current fees, you may also want to request a record of HOA fees over the last 10 years. This will show you how often these fees increase and by how much. You can ask the HOA president for this information. It should give you a better picture of what to expect.
How much is in the reserves?
The HOA will also have a reserve fund. This money is used to pay for more long-term repairs like replacing the roof. You are not necessarily looking for a specific number. If it is a newer building, there should not be many repairs needed for some time. An older building needs more money set aside for repairs, particularly if you notice any big repairs that may be required soon.
Does the building have any assessments coming up soon?
If there is not enough money to pay for repairs from the reserve fund, you will either have your HOA fees raised, or the building requests a special assessment. A special assessment is when condo owners pay a lump sum for needed repairs. Before you buy, you should ask if there are any pending assessments.
What are the condo rules?
The HOA has rules all homeowners must abide by. Perhaps, pets are not allowed, or certain pets may not be allowed. There will also be rules regarding changes you can make to your unit, so it will be important to understand those before you move in. You do not want to plan any renovations that are outlawed by the HOA.
What maintenance is included in the HOA fee?
HOA fees usually include maintenance of the building’s exterior and grounds. However, you will want to find out things like, if the HOA will clear snow. Does the fee include all your utilities? Who pays for a broken window? Make sure you understand what is and is not included in your HOA fees.
Asking these questions will give you a better picture of what living there will be like, as well as help you understand the costs associated with living in that condo.