5 Things You Should Know Before Buying a Condo
Condominium ownership isn’t for everyone, however, there’s a large demographic of people that benefit from owning a condominium. There are pros and cons to both the condo and a single-family house but it’s important to understand the ownership requirements, associations, and the differences between a single-family house and a condominium.
Buying a condo is a great way to ease yourself into homeownership without plunging headlong into the responsibilities of the house. You will be paying additional dues in association fees for common area maintenance, but you won’t have to maintain a lot of these common areas such as the roof, sidewalks, landscaping, windows, and siding.
If you’re considering on a condominium in Panama City Beach here are five things you better know before finalizing.
#1. How does the association’s budget look?
You want to know how the Association is being run and what their budget looks like. If there is barely any funds in the reserve accounts be aware that you will be responsible for any special assessments. Let’s say the roof needs replacing and there are not enough funds in the reserve account to do so. The association will issue a special assessment that will add to your monthly condo fees in order to cover replacement or repair costs. If the reserve fund is healthy, you probably won’t have any additional fees in the future.
#2. Is the building insured?
It’s important that you understand how the building is insured. Recently, many condo associations have reduced or drop the community’s insurance. But that can jeopardize the investment of all the homeowners. It’s important to ask about obtaining a copy of the master insurance policy. You can take it to your own insurance company and ask if it’s enough coverage. Many lenders will view the condo development itself as collateral, not just your unit so you want to make sure that you are completely covered.
#3. Vacancy rate and owners versus renters.
You’ll want to understand if there are a lot of absentee owners or what the delinquency rate it is. Many lenders will not even loan money if there are delinquent homeowners, absentee owners, or too high of a percentage of renters versus owner-occupied units.
#4. Understand the rules and restrictions.
Condo associations and complexes have their own CC & R’s which stands for covenants, conditions, and restrictions. If there’s something in there you don’t agree with it’s best to find out before you finalize the purchase. If necessary, take the document to a real estate attorney and have them go over the document with a fine tooth comb. These are typically hundreds of pages and it can be exhausting to go through but if you have specific questions you can simply ask the board. This could be pet policies, satellite dish installations, noise restrictions, or other details that you might not realize until you move in.
#5. Does a condo fit your lifestyle and is at the right investment?
Condominiums make ideal properties for single people, couples with busy lives, retirees, vacation families, or those that just don’t want a lot of maintenance. A lot of times associations will have amenities such as swimming pools, clubhouses, social clubs, trails, sports courts, and even restaurants. Is this the type of community you’d like to live in?
Condos also make a good investment for the right people. They appreciate just as fast single-family homes but the value of a condo is closely linked to the Association feet. Newer condos may require less maintenance and have lower fees but as the Association or buildings age those fees could go up so it’s important to understand your investment and if you’re willing to put forth the time, money, and effort.
Panama City Beach is chocked full of condominium buildings and we pride ourselves on our vacationers and seasonal residents. If this sounds like a great place for you to buy your vacation condo, second home, or maybe your permanent residents, start online on our website for free. You can also rent a unit in a condominium building to try it out and see if the environment and the Association fit your lifestyle and budget.