—
While they appear alluring to buyers because of their lower cost, many condo owners find themselves facing unexpected complications that can turn homeownership into a nightmare.Although condos often carry lower price tags than single-family dwellings, they come with a hidden cost. The vast majority of condos fall under a Homeowners Association (HOA), which is an unexpected burden to many buyers. Although they might operate under a different name, such as condo board, the result is the same – they control the building and can levy fees.
Not only do these organizations make rules about what people can and cannot do in their own homes, but they also charge yearly dues. If a condo owner doesn’t comply with their rules, they can also fine or even sue to enforce the rules. These fees can quickly add up, turning what the buyer thought was a lower cost investment into a money pit. In some cases, the condo building’s HOA can even drive out a condo owner through legal action.
Out of control HOAs aren’t the only worry. Home investors are often wary of condo buildings, and buyers should be, as well. The value of the condo unit is based on the occupancy rate of the building, meaning empty condos can lower the value of each individual unit. They also limit how many units can be owned by one buyer, usually to 10%. This means lenders may not extend financing unless most of the units are occupied. If the development is new or in a growing market, financing may not be an option.
Additionally, lenders may require higher down payments for condo purchases, since the value of the unit is not as stable as that of a single-family dwelling. This can be a burden for buyers who chose a condo because of the lower price point. Soon what seemed like a good deal is a financing nightmare.
It’s important for buyers to remember that condos are intended to meet the needs of a select group of people. These might include first-time buyers in urban markets, or older buyers who benefit from the property management of a condo board, as they require more assistance. Before purchasing a condo, however, these buyers should still research the building’s occupancy rate, HOA rules, and associated fees, like condo fees, taxes, and fines.
Condos may have a lower price tag, but their hidden costs can quickly add up. Before investing in these properties, homeowners should be aware of the risks. With good research, buyers can avoid a condo nightmare.
For more information about the risk of buying a condo, contact us at (832) 390-5263 or visit http://www.landandlotbuyers.com/ for more information.
Contact Info:
Name: Land and Lot Buyers
Email: Send Email
Organization: Land and Lot Buyers
Website: http://landandlotbuyers.com
Release ID: 299834
Google
RSS