Thursday, August 12, 2010
Achieving happily ever after in shared housing
A condo or townhouse community can provide a great living space for some, and may even include access to amenities like parks and pools. Before buying this property type you should exercise due diligence regarding the community's financial matters and rules that may impact your freedoms.
Obtain copies of documents listing all the current rules and restrictions--and read them carefully. Rules regarding where you can park, the hours during which you can play music or how promptly you should make home repairs can catch new residents unaware. (The Washington Post Aug. 7) At the same time, realize the rules may also protect you from hearing the neighbor's rock concert at 3am.
While on site, observe the upkeep of common areas by property managers. Take note of landscaping detail, structures in disrepair, even burned out light bulbs. The quality of upkeep of those areas can have a huge effect on whether you'll enjoy living in your condo, and will affect its future resale value.
Identify all ownership costs of living in a shared community. The costs of maintaining the common property is usually covered by an association fee. Find out how much the fee is and exactly what maintenance the fee covers. Repairs or improvement cost beyond what the association fees can cover may result in a special assessment.
Ask about the Home Owners Association's financial reserve. The reserve fund is just one indicator of a Home Owners Association's financial condition, and inadequate reserve could lead to a shortfall in maintenance money.
Click here for more from the Home & Family Finance(R) Resource Center.