You should also refer to all of the other material on buying including mortgage selection, and service providers.

    There is something to be said for the care free life of condo living. In most complexes, all the area outside of your walls is taken care of and in some newer 55+ units, even your heating /ac systems are maintained. There are other items, extremely valuable to the condo buyer that we will look at, that affects, not only your purchase, but the eventual resale as well and we will go in depth on them.
    Not all condo associations are created equal. Over the years, some of the complexes have put themselves in trouble by refusing to address issues and allowed their properties to fall into disrepair, because they didn’t want to increase the monthly condo fees. What results is disastrous repairs that because there was no funding for them, resulted in special assessments that would catch everyone by surprise and a declining sales price due to the complex not showing like it should.
    Well run complexes, budget in long term maintenance like roof repair, deck maintanence, etc., maintain a healthy reserve (more on that later) and even budget out future increases in association fees. These complexes protect your investment and your resale value.
    Unfortunately some of the ills of the different complexes may not come up until you are under contract. However the good news is, it’s not too late! Under state law the seller needs to provide you with the condo documents. You have 5 days to review the documents for resale units and 15 days to review them for new complexes. If you don’t like anything in the documents, including the color of the ink, you may get out of the contract and get your deposit back. In the condo documents, besides a batch of boring reading, there are the important items. The basics are the rules and regulations which include pet restrictions, storage restrictions and other rules of the complex. You should review them to make sure you are ok with the rules of the complex. The other important information is the budget and reserves. The budget should include money set aside for the capital reserve for large projects. In well run associations, there may even be a list of replacement items for the complex for many years to come, including roofs, decks, etc. with an estimate for what it will cost. There also should be a reserve in the account now, primarily based on the age of the unit and anticipated needs. For example, if you are buying into a new complex, there will not be much of a need for a large reserve as major items will not likely need to be replaced soon, however, there should be money coming from the general budget into the reserves to build up a reserve. In older complexes, the reserve should be larger. If you are touring a condo complex and the pool is crumbling, the decks need staining and the roof is worn out, you had better check to see if the capital reserve is in place to cover these items. If not, when an emergency repair needs to be done, all of the owners will face an assessment to repair the damage.
    The other information that is important and will need to be asked for is the investor to owner occupant ratio of the complex. When the real estate market falters, many condo owners that need to get out, rent their units, rather than sell and take a loss. This is prevalent in less expensive units and can have a snowballing effect on the value of the units. Banks and mortgage companies know that and many will not lend to complexes with less than a 5o% owner occupancy rate. This makes it impossible to get CHFA, VA or other government financing and difficult to get regular conventional financing with extra down payment and higher interest rates resulting. This in turn makes the units more difficult to sell. These units may be ok (see investment properties) for investors looking for cash flow, but not if it is going to be your principle residence and you needed to eventually resell.
    When you become an owner, be informed. Go to the meetings, read the budgets and rally for good maintenance on the property. If you are shopping and the price seems low, the condo fee seems low, be curious and thoroughly investigate the financial soundness of the complex.
    With all large real estate purchases, including condos, get a home inspection done. (See service providers. The fee for condos varies, though normally around $300, not including radon, which you should do. The inspector will not only give you information on the unit itself, but will also let you know about the condition of the outside of the building and the anticipated life expectancy of the roof, siding, decks, etc...

Condos could be a great way of life for you, if you know what lies ahead!