Condo living isn't for everyone.
The advantages of community living can quickly be cancelled out by the disadvantages of community living. The ideal living situation can turn ugly very quickly. For this reason, it's really critical that new buyers look very carefully at the structure of the organization BEFORE signing on the bottom line.
Of course, location and curb appeal are critical to your decision to buy. But, be careful not to fall in love just yet. Too many buyers (and owners) don't understand that owning a condominium is not the same as owning your own property or the same as renting.
Be sure to as your realtor and your seller for the rest of the story …
The binding documents including ByLaws, Declarations, Rules & Regulations and meeting minutes. And of course, get yourself a copy of your State Condominium Act. All of these documents will impact your peaceful enjoyment of the property. Buying a condominium is not a case where ignorance is bliss.
The financials…a beautiful condominium may be in desperate straits. You want to know what your monthly assessments are. But there's more. How are they being spent? Is there enough money in the Association's accounts to pay normal operating expenses AND put away money for future repairs? Is there an adequate reserve fund to pay for major projects like replacing a roof? Is there any indication of possible special assessments in the future?
Condominium ownership is community living. It has its perks. It gives each owner many benefits that might not otherwise be available to the owner of a single family dwelling. But it can turn ugly really quickly if you don't understand that community living also carries with it responsibilities. Owners do need to participate in the management of the property at some level – even if it is only attending meetings, asking questions and speaking up when there are problems.
The level of participating may vary greatly from one condominium to another. The Board of Directors is the governing body. They oversee the management of the entire condominium complex, making sure that common areas are maintained and that the community runs smoothly. But they are accountable to the Unit Owners, too. You want to get acquainted with the Board and it's policies and procedures BEFORE you buy. Ask to attend a meeting and get acquainted with the individuals who are in office and try to get acqainted with some of the Unit Owners as well.
Find out how the property is managed. Many larger buildings have a Management Company that is answerable to the Board of Directors. But many smaller condominiums are self-managed. There are pros and cons to each management option. How is your dream condo handled? What does that mean to you?
The real estate market has softened considerably here in Illinois and across the country. At the same time many cities, hoping to ensure the highest and best use of properties in their jurisdiction and the increased tax revenues that can be achieved by higher density residential living, are supporting the continued development of more and more condominiums. Ask what the law of supply and demand will do to your investment. Many feel that the real estate market has peaked and the potential of rapid appreciation that's been seen in the past five years is a thing of the past.
Of course, all buyers are a bit more wary at this time. No matter what your thoughts on these issues, be sure to think long and hard before putting down any money into that condominium. Think ahead 5 – 10 years and envision what might happen in that time that will affect your investment and your pocketbook. Ask the hard questions. You're investing in a single Unit, true. But you're also investing in a total package with ownership rights and responsibilities related to the entire property. Be sure you understand what that means. And if you aren't sure…ask first…invest only when you're satisfied with the answers.