Investing in a condominium is not to be taken lightly.
With the cost of living today not many can afford a single family residence on its own plot of land – that's the great American dream that is rapidly falling by the wayside, at least in places like Chicago.
Condos offer what would appear to be a great alternative, actually, giving us a carefree, easy-to-maintain living space. They resemble apartments in that regard. We have our space and care for that…never mind the worries of landscaping, plumbing, tuckpointing, roofs and other time-intensive, costly maintenance.
At least that's what all too many think.
Don't underestimate that investment if you're going into a condo. You WILL be responsible for making sure that your investment continues to hold its value.
You'll pay assessment fees over and above your mortgage payments. Those assessments will, hopefully, cover the cost of maintenance, and administration of your condominium association. And if they aren't sufficient, you will be responsible for paying special assessments to cover additional costs.
When buying your condo be sure to review the ByLaws, Rules and Regulations, financial reports and minutes of meetings held by the Association and the Board of Directors. Ask about the Reserve Fund that will be used to cover major costs beyond the day-to-day costs of the Association. Ask about any planned special assessments in the works.
Remember, nothing is free. If you aren't doing the actual maintenance on that building you plan to live in, you will be paying someone — the Association — to do it for you.
As a condominium resident and a member of our Board of Directors, I'm constantly amazed at how many move into condominiums without attending to these details.
Condominiums are not apartments. Everyone who buys a condo understands that the mortgage covers the costs of the individual unit. And most do understand that they are responsible for maintaining everything within their four walls. It amazes me how many don't understand that. But then the plumbing backs up or the boiler gives out or the roof needs to be replaced. These are the kinds of costs all too many new condo owners don't question when they're buying. If the building is not properly managed and maintained, these kinds of issues may result in a special assessment that could easily put an owner in a financial bind.
Find out when the Association meets and plan to be there. Get actively involved. Your financial well-being depends on it.