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GRANT TREVITHICK - INVESTOR EXPLAINS BUYING A CONDO

  • Posted March 9, 2023

APARTMENT COMPLEXES TO CONDOMINIUMS

Grant Trevithick Carollton Real Estate Investor here with another pro tip. As a Real Estate Investor all throughout Dallas, Carrollton, Fort Worth, and pretty much everywhere in the metroplex. I have learned what it takes to buy condominiums and I am here to share with you some insights.

If you have never bought a condominium—usually shortened to just a condo—you may be surprised at all of the different issues to consider. Buying a condo is not the same as buying a house. You'll likely have adjoining walls with your neighbors, as well as other physical elements that are different from a freestanding home.

Additionally, the entire process you need to go through to make your decision and obtain a mortgage may also differ significantly.

KEY TAKEAWAYS

Before buying a condo, it's important to understand the differences between living in a condo versus a single-family home and to determine if the condo lifestyle is right for you.

Condos are usually less expensive than single-family homes and have lower maintenance requirements, making them good options for homebuyers on a budget or people looking to downsize.

Loans can be harder to get for a condo because some lenders have strict requirements regarding owner occupancy and loan-to-value ratios.

Condo owners will have to abide by the covenants, conditions, and restrictions (CC&Rs) of the complex or risk being fined, forced to comply or sued.

Condo owners pay monthly fees that cover the cost for ongoing maintenance and repairs of common areas within the complex, such as the grounds, pools, lobbies, elevators, and recreation rooms.

Who Should Own a Condo?

One of the first things you need to ask yourself is, "Are you the condo type?" and what exactly does that mean? Being a city-dweller, for one. Many condos are located in urban settings. Condos are springing up in urban downtowns, and some are even building items of convenience right into the development, including grocery stores, bank branches, and other businesses. With that convenience may come more noise and congestion.

One of the things that come with condo ownership is the Homeowners Association (HOA). It sets out a declaration of covenants, conditions, and restrictions (CC&Rs) that lists things that you, as the condo owner, must comply with in order to live there. If you find that you won't be able to abide by the CC&Rs, condo life might not be for you. Non-compliance could mean you could be fined, forced to comply, or even sued.

The Bottom Line

Condominiums can be a good investment for the right buyer in the right location when times are tough, though they can be harder to buy and sell than a detached house. Before purchasing a condo, be sure to do your due diligence and check out the HOA, CC&Rs, and any tax and insurance situations.

Also, be sure to get a real estate agent and a loan officer that has a lot of condo sales experience, as the issues surrounding such a purchase are not as simple as those with a traditional single-family home.


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