Downsizing Tip: Condo Living
Long-time homeowners who are thinking about a downsizing move and currently own a single-family home may consider the option of purchasing a condo for their next home. What do you need to think about when considering condos? Is a condo right for you?
Before you can make a decision about owning a condo, you probably need to know what a condo is. Often when people here the word “condo,” they think of apartment-style living. Contrary to what many people think, a condominium is not a particular building style. It is actually a shared form of ownership. This means that all owners are financially tied to one another. Most condos have the following components in common:
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Units - The actual living space. Owned by the person who purchased the condo.
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Limited Common Elements - Owned by the association but available for the exclusive use of a particular owner.
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Common Elements - Owned and maintained by the association and available for use by all the owners.
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Condos can be apartment-style, townhomes, duplexes, and even standalone, single-family homes. In addition to the variety of styles of condos available, they also come with different amenities (underground parking, gym, clubhouse, theater room, guest suite, etc).
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Lifestyle - Some condo communities are also close-knit and host community events and such for owners to participate in. Condos also have rules and regulations that define the lifestyle expectations for residents. There can be any number of rules but some of the most common things you see are pet restrictions, rules about how you can use your balcony/patio, whether renting the units is allowed, etc.
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Finances - Most condos have monthly maintenance fees called “condo dues.” These dues cover common expenses within the condo association, such as lawn care and snow removal. Associations should also be setting aside a portion of their monthly fees in a “reserve account.” This account will be used to take care of bigger projects over time such as building roof replacements. If the association isn’t saving enough money, they may not have money available to handle the repairs needed and will have to charge one-time special assessments. An association's financial status needs to be evaluated closely prior to becoming an owner in that association.
Evaluating condo options with a professional is highly recommended. It’s one of those things that you may not know what you don’t know and a professional can help you sort through all the options and documentation.
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