How Resalable is the Condo?
Unless you plan on kicking the bucket with this condo still in your name, at some point you'll want to sell it. To avoid having buyers laugh in your face 10 years down the line when they hear your asking price, do some digging to help ensure you won't have to sell at a loss in the future. Unless you have a Magic 8-Ball that actually works (you don't), there's no guarantee you'll recoup your investment or make additional profits, but certain questions will help give you a better picture of what you're buying into.
If your condo association charges higher fees compared to similar properties, obviously that's a problem, so ask around to make sure the prices are in the same ballpark as the competition. If your condo complex has lots of renters instead of owners, that'll be a factor, too. Owner-only properties bring a better resale value. The ratio of sold to unsold condos matters as well – beware of complexes full of unsold, vacant units. Lenders also don't look favorably on established complexes with lots of unsold units. Without a good sell rate, condo buying can become a major hassle.
You can't predict every market fluctuation, but with a little savvy, you can make an informed decision. What's the strength of the market in your city and zip code? Are condos scarce, or is the market loaded with them? Another consideration to keep in mind is how long you intend to live in your condo. If it's less than five years, a condo might not be the best choice for you – they take longer to appreciate in value than typical housing.
Author's Note: 5 Questions to Ask When Buying a Condo
This article was interesting to write because I knew very little about the pros and cons of condo life. Like many people, I just assumed it meant staff-managed lawn care combined with an apartment-like lifestyle. There's obviously a lot more to it than that, though.
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- Bruss, Robert. "Asking right questions can avoid bad condo buy." Chicago Tribune. March 29, 2007. (June 9, 2012.) http://www.chicagotribune.com/classified/realestate/advice/chi-0703270442mar29,0,7850542.story
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- Fulmer, Melinda. "5 questions to ask before buying a condo." MSN Real Estate. (June 9, 2012.) http://realestate.msn.com/article.aspx?cp-documentid=13107731
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- Irwin, Robert. "Tips and Traps When Buying a Condo, Co-op, Or Townhouse. McGraw-Hill Companies. 2007. (July 9, 2012.) http://books.google.com/books/about/Tips_and_Traps_When_Buying_a_Condo_Co_op.html?id=ILLdKip-8woC
- Levin, Heather. "9 Important Questions to Ask When Buying a Condo." Money Crashers. June 23, 2011. (June 9, 2012.) http://www.moneycrashers.com/questions-ask-buying-condo/
- Setzer, Glenn. "Buying A Condo Is Not Like Buying A House." Mortgage News Daily. Dec. 13, 2004. (June 9, 2012.) http://www.mortgagenewsdaily.com/12132004_Buying_A_Condo_Is_Not_Like_Buying_A_House.asp
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