Home Buying in Albuquerque>Question Details

Zuglo, Home Buyer in Albuquerque Meadows,...

Thinking about buying a condo..Does that HOA fee goes up often? Is it hard to sell it? What is a bad thing about a condo? Does the value goes up?

Asked by Zuglo, Albuquerque Meadows, Albuquerque, NM Sat Sep 5, 2009

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Mike Hart’s answer
A home inspection can be performed on a condo. Request that the common areas be inspected also, where accessible. If the roof is near the end of its life, or other repairs to the common areas are needed, the inspection should report this, and the condo association should have adequate reserves to cover these near future expenses. If the reserve is too low, the fees will go up to cover the repairs as they are required. If the fee increases are voted against, the condos will be poorly mantained.

The inspection and review of the condo associations mantainence records and reserve account can give you a good idea of what to expect in the way of changes to the HOA fees.
1 vote Thank Flag Link Sat Sep 5, 2009
It's a great time to buy a condo, if you can find financing. Condo financing has become extremely difficult to obtain because so may condo owners have gone into default on their mortgages. This is especially true on the coasts and in vacation destinations where investor activity was rampant. FHA loans are nearly impossible on condos; You'll probably have to go with a conventional loan with more money down.

HOA fees can go up, but usually a vote is required by the association to increase them. The owners are voting members, so increases are not all that common. There can also be assessments for specific repairs such as new roofs. These are temporary increases until the repairs are paid for. When you buy a condo you need to check out the financials and make sure they have adequate reserves for maintenance.

Appreciation on condos tends to lag behind the rest of the real estate market. They are the last to go up in price and the first to go down when times are tough.

However, if you want a low maintenance place where someone else takes care of the grounds and the exterior of the building, and you want a place with a pool and a exercise room, then a condo may be the right home for you.
1 vote Thank Flag Link Sat Sep 5, 2009
The HOA fee can go up, but it definitely does not happen often. A condo can be a great investment too. ANY property can be sold if priced well. The value can go up or down, as is usually the case with the rest of the market. I have sold many condos in Albuquerque and would be happy to discuss your options with you. I included a link with some condos for sale...
1 vote Thank Flag Link Sat Sep 5, 2009
Hi Zuglo,
Values do go up.. and over time, so do HOA fees. Good management should plan and budget well enough to avoid large or surprise increases in financial burdens to owners. They are not that hard to sell, and are subject to the same supply and demand economics as any other real estate. There is a smaller market for condos only because people often want to buy their own separate property when making an investment (don't want to still feel like they are living in an apartment). But there are still good values and investments in addition to nice places to live. Investment value needs to be a good part of your decision, but more importantly, where will you be comfortable and happy (quality of life), especially if you will stay for awhile? I would not suggest avoiding condos, just make sure you know what you are getting into (which I will help you analyze the right data to make sure you do).
Thx!
David
0 votes Thank Flag Link Tue Sep 8, 2009
Zuglo,

Condominiums and Townhomes are a lifestyle choice and not always the best investment choice. If you don't like to cut the grass, trim the hedges, pull weeds, make ongoing repairs to the exterior of the Unit but enjoy having access to an exercise facility, swimming pool and the like at your disposal then you are making a lifestyle decision. I know quite a few DINKS (Dual Income No Kids) that love to live in the downtown area of a major city to have access to nightlife, restaurants, sporting venues, etc. who usually don't have time for the upkeep of a home.... again a lifestyle.

Single Family Homes in most Metropolitan Areas outperform Condos and Townhomes over the long term with regard to appreciation. Condo Association Fees are typically higher than most Single Family Home Owner's Associations... and since these are not tax deductible, I am only a fan when the Dues are very reasonable when compared to the level of amenity.

I can support a Condominium purchase if bought at a deep discount in today's market for a long-term hold. If you can rent it out and get positive cash flow, then I am always a fan of having someone else pay down a mortgage when I am getting the Tax Deduction and able to Depreciate it over 20+ years...

If you decide to purchase a Condo, make sure you understand the absorption rate of condos in your area and also make sure that the Condo Association is stable and well-financed. A full-time professional Realtor experienced in the Condo market can help you make sound decisions.

Good Luck!
0 votes Thank Flag Link Mon Sep 7, 2009
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