Whether they come in the form of buying a condo or a multi-family house, investing in real estate property has always been a tried-and-true method for investment. With around 44 million renter-occupied homes, the demand for rental units and houses doesn’t look like it’s planning to slow down any time soon.
However, as with any investment that’s going to cost you a nice chunk of money in upfront costs, it’s critical to take our time with researching and picking the right property for your goals and current resources.
If you’ve been giving the thought of buying a condo some thought, you’ve come to the right place. Keep on reading for our full breakdown of all the seven top tips for first condo buyers.
1. Buying a Condo 101: Does It Fit Your Lifestyle?
Before we start our deep dive into the intricacies of what makes the perfect fit for your investment strategy, let’s make sure that a condo is what you actually want.
The best way to figure out the answer to that question is by considering your lifestyle. Are you a fan of mowing the lawn and trimming hedges or do you prefer the minimal amount of maintenance possible?
If you’re not enamored with the idea of having a big backyard, and the required maintenance that having one would entail, then you’re right in wanting to invest in buying a condo.
2. Location, Location, Location
After you’ve made the primary decision of investing in a condo, your secondary concern should be all about location.
After all, buying a condo in an area that has declining renting rates, instead of the opposite, will set you up for failure.
Pick a city or area that’s already growing, and their revitalization plans are already picking up steam. Those are the kind of areas that will provide you with the highest returns on your investment.
You’ll want to check out clear condos. Those have truly great forecasting worth.
3. Pick the Right Realtor
Realtors come in all shapes, sizes, and experiences.
You’ll want to pick a real estate agent that specializes in selling condos with a track record to match. This way, you can feel a bit lighter, having placed your trust in someone who knows what they’re doing, as well as keeping your best interest at heart.
In addition, this agent will be able to show you the right condo developments in your area of choice. Also, being in the market for years on end will give them insider information on what issues those developments might have.
Needless to say, this sort of information can make or break your investment. The same rule applies to any acrimony over community issues, as well as knowing which developments have done well for themselves when it comes to resale values.
4. Highlight the Amenities You Want
Condos are well-known in the real estate market for coming in with all sorts of bells and whistles. You’ll want to make sure that those are the bells and whistles that you want.
Otherwise known as amenities, part of the price you’re paying is set with those amenities in mind. Put everything you want on your condo list.
Furthermore, even if you’re not interested in using amenities like a pool or gym space, you might still want to pick a condo with them included. Amenities can easily increase your sale price in the future, same as giving you a net lower sale price if they’re unavailable.
5. Find an FHA-Approved Condo
As this is your first time buying a condo, you might be unaware that getting financing or a mortgage for a condo is a rather involved process; more so than other types of properties.
Generally speaking, this has nothing to do with your own finances, and more to do with how the condo development itself will always get more scrutiny from the regulatory institutions.
You can make it much easier on yourself, and find the FHA’s list of approved condos. It’ll make your financing process go much faster, in addition to the stable requirements you have to meet before applying.
6. Check Out the Association Fees and Regulations
Speaking of regulations, condos will come with additional fees, so you won’t only have your mortgage to contend with.
For instance, there will be condo association fees that are responsible for maintaining the property and its amenities. Before signing on the dotted line, you’ll want to be rather familiar with those fees and ask for the breakdown.
Besides, now is the time to ask about any community’s house rules. Investing in a condo means that there are some rules that you’ll have to follow for the benefit of the whole community. For example, they might let you know about the protocol for booking common areas, or whether there are any noise restrictions.
Getting to know the community rules ahead of time will help you figure out whether this is the type of community that is a good fit for your lifestyle and personality or not.
7. Ask About the Special Assessments
In most cases, you’ll find that the condo association will plan on funding special projects. Usually, you’ll find that an assessment will be voted on by the HOA board, so the community residents will (at least) be aware of the project.
You’ll want to double-check as those fees will be imposed on your account, so you’ll want to avoid getting surprised with your monthly bills.
Exploring Condo Living
Buying a condo doesn’t have to be a convoluted process, with high amounts of risk, and equal amounts of hair-pulling. Once you’ve done your research, you’ll feel a lot more prepared to take this step.
Hopefully, our explainer with the key seven steps you’ll want to take when you’re buying a condo for the first time has shed some light on the process for you. Remember to always reach out to the professionals if you have any technical questions.
If you enjoyed our article, make sure to check out our additional tips and investment strategies, all available to you in our real estate section.