So you're thinking about stepping into the carefree life of condo living! Awesome! Indianapolis and the surrounding areas have lots of great options.
Whether you're thinking about purchasing a condo in the heart of Indianapolis, or an over 55 community in the burbs -- It takes additional due diligence to ensure a condo purchase is a sound investment. The last thing you want is to buy a great new place and then discover the Home Owner's Association (HOA) is bankrupt or are requiring each homeowner to pay a special assessment to cover needed repairs – yes they can do that!
Having helped many buyers successfully navigate condo purchases all around Indianapolis -- here are our top “go to” questions that help our buyers ensure they are making a sound investment that is also the perfect fit for their lifestyle.
- Is the HOA Financially Solvent?
Condo associations usually care for the exterior maintenance of the building, yards and common areas. It’s essential they have a financial reserve in order to make needed repairs down the road. If they are short on funds to make improvement they may issue a “special assessment” in addition to the monthly HOA fees. This can be thousands of dollars and it has to be paid before the owner can re-sell the property.
2. What is the percentage of rentals to homeowners who reside in the complex?
This is a good indicator of both the stability and atmosphere. Are you looking for a quiet community or are you ok with renters who are often younger and may be more likely to keep late hours or throw loud parties?
3. Do they have a community newsletter?
If so, request a copy of a recent issue. This is a great way to find out what’s happening in the community, including activities and condo owner concerns.
4. What Covenants and Restrictions apply?
Get a copy of the Covenants and Restrictions and READ them! They are usually more detailed than your run of the mill neighborhood restrictions. For instance… What are the monthly fees and what is the procedure for raising them? Are you allowed to have pets? Where do guests park? Do you have assigned parking spaces? Are there noise restrictions? Can you rent the property? What exactly does the HOA maintain? (Often windows and doors are the home owners responsibility, even if the association maintains the exterior of the building.)
5. What is the turnover rate and length of time on market?
High turnover and or long days on market may signal there are issues or you may also have difficulty selling down the road.
6. Is the complex on the FHA approved condo list?
Even though you may be purchasing with cash or using a conventional mortgage, many buyers rely on low down payment FHA loans. If the community is not on the FHA approved list, it may be more difficult to re-sell the condo. There are even a few condos that don't qualify for conventional financing.
7. Is there an on-site property manager?
It's great to know that there is someone located at the community who keeps an eye on things and is quick to respond to any issues. Of course a full time on-site manager may also mean higher monthly fees.
8. What do the neighbors say?
Get the real scoop! People love to talk about where they live. If they love it, you probably will too! If they don't... you may want to reconsider.
If you're considering carefree condo living -- make sure you’re guided through the process by someone who understands the unique circumstances surrounding a condo purchase. It’s a huge investment. Let's make it a good one!
Unless otherwise noted, blogs are authored by Tonda or Steve Hoagland