Suze Asks… I want to buy a condo but heard they are bad investments. Any advice?

Suze, a condo is a good investment for some people…others not so much. My best advice is Buyer Beware! Sometimes condos seem more attractive because they have lower prices than single family homes, but that doesn’t mean the risk is lower.  After you do the legwork to determine you want a buy a place and where, just make sure you do your research on the condo – it’s not always a bad investment.

Ask the following questions:

What is the monthly maintenance fee?

This is an additional fee to your mortgage payment to cover common areas, insurance, trash, pools and amenities etc…

What is the ratio at live in the units versus rentals?

At least 70 of owner occupants is ideal. Homeowners that occupy their units are more likely to have pride in ownership and keep the place looking nice and therefore hold the property value.

What is the current delinquency of homeowners association dues?

Remember the current homeowners sometimes have to make up the shortfall for those that don’t pay – for example properties in short sale or foreclosure typically don’t pay the HOA dues until the property is sold – sometimes that can be a year or more.

What is the Associations reserve fund and how much money goes into it?

The reserve is used for capital improvements like roofs, fencing and common area repairs. If there is insufficient reserve the owners can be assessed a special assessment to pay for the improvements.

Work with a mortgage professional and real estate agent to make sure you get the very best advice and education prior to finding the perfect condo!

Meet Cheryl!

About Cheryl

As a successful business owner and community leader, Cheryl Braunschweiger is known and respected for getting things done with a degree of skill and enthusiasm that bring out the best in those around her - colleagues, clients and friends. The name of her business, ALMC Mortgage, reflects Cheryl's philosophy and personality. She says it stands for All Loans Must Close –a reflection of her determination to do whatever it takes to serve her clients. Cheryl has been in the mortgage lending business for 20 years. Read More About Cheryl
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