You’re a graduate of UW-Stevens Point, graduating class of 2016. You got a job in the Wausau area right after college, met your fiancée there, and have planted roots. You both have rented to this point. You’ve both been recently promoted at your jobs, and you’ve both been adding to your savings accounts. Now feels like the time to make the leap from renting to owning.
But buying a home is expensive nowadays and you’re not sure if you’re ready for everything that goes along with owning a traditional home. Maybe a condo is the right fit, you think.
Benefits of owning a condo
First, a condo purchase often means a low-maintenance lifestyle. Unlike single-family homes, condos usually include maintenance services like lawn care, snow removal, and exterior repairs. Not having to worry about these tasks means more time for kayaking on the Wisconsin River or snowboarding at Granite Peak.
Another benefit of owning a condo is access to amenities. Many condo communities offer features like swimming pools, fitness centers, and clubhouses, providing convenient recreational and social opportunities right outside your front door.
Additionally, condo ownership fosters a sense of community. Living in a condo complex means being surrounded by neighbors who share common spaces and interests, which could lead to expanding your friend network.
Understanding condo association fees
The above benefits come at a cost – condo association fees. You’ll need to budget hundreds of dollars per month on top of your monthly mortgage payment. So before you commit to buying a condo, give thoughtful consideration to:
Monthly fees: These fees typically cover services like landscaping, snow removal, trash collection, and building maintenance. Understand the breakdown of these fees to see if they align with your budget and if the amenities and services provided are worth it.
Reserve funds: Condo associations often establish reserve funds for future repairs or replacements of shared building features. Review the association’s financial statements to assess the adequacy of the reserve funds and the association’s ability to handle unexpected expenses. If reserve funds are low, well, see below…
Special assessments: Condo owners may be subject to special assessments for unexpected expenses or major repairs if there isn’t enough money in reserve funds. Roof replacement, HVAC system upgrades, elevator repair, and plumbing/sewer line repairs are examples of major updates that may qualify for special assessments, meaning the costs could be passed along to condo owners. Before signing the dotted line, ask about any upcoming special assessments to avoid unexpected financial burdens.
Condo inspections and due diligence
This will be the biggest purchase you’ve ever made, so don’t leave anything to chance. Do your due diligence and have a thorough inspection performed.
Hire professional inspector: Hire a professional inspector who specializes in condo inspections. If you use a realtor, they’ll recommend one they trust. The inspector will evaluate the unit and identify potential issues or defects, providing a full report on the condo’s condition.
Review condo documents: Review all condo documents, including the declaration of condominium, bylaws, rules and regulations, financial statements, and meeting minutes. These will give you insight into the condo association’s financial health and any ongoing legal disputes.
Don’t worry, you don’t have to be a Marathon County private investigator to unearth these documents. You can request these documents from your realtor, the seller, or the seller’s realtor.
Check building maintenance: Assess the overall building maintenance to understand the quality of living in the condo. Look for signs of neglect or poor maintenance, such as cracked walls, leaks, or poorly maintained common areas. A well-maintained building is a good sign the condo association is responsible.
Condo financing options
You’ll want to understand your financing options from the get-go. Lenders look at different things when financing a condo.
They typically look at factors like the condo’s financial health, homeowner association fees, and occupancy rates (the higher, the better). Make sure the condo you’re considering checks all these boxes.
If you’re a first-time homebuyer or a veteran, FHA and VA financing can be excellent options. FHA loans have lower down payment requirements, while VA loans offer favorable terms for eligible veterans.
It’s also worth noting condo living often involves shared spaces and amenities governed by specific rules and regulations. Evaluate these guidelines to ensure they line up with your lifestyle and preferences.
Whether you buy a condo or single-family home, make sure your new home and everything inside it are protected. Connect with a local Rural Mutual agent to create a customized coverage plan for your new home.
