5 Questions to Ask When Buying a Condo

How Sound Are the Finances?

Condo associations charge monthly fees for maintenance costs. This money covers the upkeep of the condo in the short and long term, along with the price tag for the property management team if there is one. To pay for major repairs when they crop up, the condo association should be tucking away a portion of these fees each month. The older the condo complex, the greater the amount that should be held in reserve.

If a condo association doesn't have enough money in its replacement reserves, when big repairs come up, like the replacement of an aging roof, you might see a hike in your monthly fees or a one-time special assessment to cover the costs. Make sure you find out how financially sound a condo association is before you leap on board. Ask for proof of solid replacement reserves.

You also need to comb over the condo complex's insurance policy to find out what it covers. Does the complex's policy cover just the buildings themselves, or does it include your possessions as well? Does it handle all contingencies including flooding? This information will help you figure out what you'll need to pay for in a policy of your own.

Finally, consider the amount of the monthly fees themselves. They're on top of your mortgage payments, after all, so make sure you can afford them.