Although the entire real estate market is experiencing substantial price appreciation, single-family homes have been leading the way. With the push towards opting for more space, many Americans have been looking to single-family homes in the suburbs to meet these needs. Needless to say, the robust price growth combined with limited inventory of single-family homes has led many buyers to consider a condo purchase instead. Some of the advantages of condo living include but are not limited to, numerous amenities, maintenance-free living, and typically a desirable location. For example, for many Americans a beachfront condo is the only financially feasible way to actually live on the beach. As with any property purchase, it is important to analyze all the costs involved.
Additional costs
- Homeowner’s Association Fees (HOA fees): Although it is nice for condo owners to not have to worry about maintenance items such as landscaping, roofing, and decking, the costs for these items is typically incorporated in the HOA fees. These fees are typically paid on a quarterly basis, but may also come in either monthly or annual installments. Oftentimes, these HOA fees may also include items such water, cable TV, and internet. It is important to remember that you can count on HOA fees rising over the years as the building ages and the cost of various maintenance items also increase. Therefore, it is important to analyze a building’s financial statements prior to a condo purchase. Ideally, the HOA will have adequate financial reserves built up for any unforeseen major repairs.
- Special assessments: Although HOA fees typically cover general maintenance expenses, unplanned expenses are inevitable for any building. When these expenses occur, they are typically passed on to the unit owners in the form of a special assessment. These expenses are typically quite substantial and therefore the building’s financial reserves are not able to cover them. For example, oceanfront condos in South Florida are known to have concrete restoration repairs performed every few years. This typically requires extensive concrete work on the building that can not only be quite expensive, but also quite disruptive to the day-to-day living of the residents.
- Additional insurance: Typically, buildings carry general insurance for the building and its common areas. With this said, it is also quite possible that condo unit owners will also need to carry additional insurance. Using the example of an oceanfront condo again, it is quite common that additional hurricane and flood insurance be obtained by condo unit owners. If you are considering a condo purchase, it is recommended that you determine what the current insurance protects before buying.
Summary
Whether you are buying a vacation home, downsizing after retiring, or looking to move to the ocean, a condo offers many advantages. As with any purchase, it is critical that you become well-informed of all costs associated with a particular condo. As always, consulting with your real estate agent will be extremely important. In addition, you may also want to consult with your mortgage broker, insurance agent, and property association manager to gain a full understanding of the various factors to consider. Throughout South Florida, condos offer many advantages for those looking to simplify their lives without the various maintenance responsibilities.
At Live South Florida Realty, Inc. we have assisted many clients with their real estate needs. Are you looking to buy or sell a property in South Florida? Now more than ever, it is critical to have a qualified real estate team and the proper search tools behind you. Live South Florida Realty, Inc., has been a leader in the South Florida market for many years. Let our team of professionals assist you with buying or selling your piece of paradise today! In addition, our recently launched “Florida Home Search” app is now available on the Apple App Store and Google Play Store. With real-time MLS feeds, this app lets you set your own alerts to notify you as soon as a property meeting your needs hits the market. Furthermore, it will also let you know of recent closed sales in your area so that you may be even more educated on the market. Be sure to download this app for your smartphone or tablet today!
