Condominiums, or condos for short, are buildings wherein individuals separately own their residential units, though with certain limitations. However, they jointly own some common areas on the exterior side, such as the land, lobby, hallways, swimming pool, grounds, and parking lot, among others. In other words, a condominium unit offers private ownership of personal apartment, along with shared ownership of public spaces. Initially, they were not quite popular, mainly due to the aspiration of the single family homes. However, with increasing rates and space crunch, condos are increasingly becoming popular amongst both single and retiring couples. Though such an arrangement has its own set of advantages, it does have a few disadvantages as well. To find out more about the drawbacks of buying a condo, read through the following segment to make a wise decision.
Disadvantages of Buying a Condominium
- In case of a condo, you will have to pay a monthly maintenance and management fee that is separate from your mortgage payment. Watch out for any unnecessary high monthly charges and do not hesitate to ask for a copy of the latest financial statement from the homeowner’s association. Chances are that this fee is most likely to increase every year, which could rise faster than the rate of inflation as well. Also, most decisions come out of mutual agreement of all the owners in the condos; thus, you may land up paying fees for certain services that you don’t even use. It is best to find out the fees beforehand rather than cribbing over the amount once you’ve bought the condo.
- Condominiums provide less privacy as compared to detached single-family home. The noise generated in communal living is always a big disadvantage for those who wish to have private space for themselves.
- CCRs, or Covenants, Codes and Restrictions, can be quite restraining. They are defined as the bylaws that govern the use of the property. It is advisable to go through a copy of the CCRs and review them, before deciding to make an offer. While you have all the freedom to renovate and decorate your interiors, like kitchen and bathrooms, your control over the exteriors is limited and hence, you may be restricted with certain conditions on making changes or improvements to such space. Besides, you can be prohibited on bringing pets, renting or subletting units, and avoiding noise during certain time periods.
- Find out the owner-to-tenant ratio. As most of the condominiums are purchased as investments, there is a high possibility of tenants living in the building.
- The resale value is another issue, as some of the associations are underrated due to overbuilding. Also, the owners may have to seek permission from the association or board before calculating the re-sale value and putting up advertisements for the same.
- Parking can prove to be a real pain in the neck, as at some of the places, the parking space isn’t allotted. In many developments, however, this simply isn’t the case. If it is on a first come first serve basis, then you might find it really difficult to manage the situation, for yourself and your guests as well. Even though it is a small issue, it can eventually transform into a major concern, worsening the situation in the long-run. And if there are guests at someone’s place, parking your own car can prove to be frustrating.
Though these factors play a major role in discouraging people from owing condos, a large number of homebuyers see them as huge investments, especially when they fit into their lifestyle and pocketbook. Study the merits and demerits of purchasing a condominium before taking that large plunge.