The U.S. condo market has been good to real estate investors. In the past few years the median sales price of the average condo has stayed on par and even surpassed that of the single-family home. But with the condo's rapid increase in popularity, and more developments springing up everywhere, there's an added responsibility on behalf of the buyer to know what they are buying into.
Here are some things to consider further investigating before making a smart condo purchase:
Whether you're looking at your condo purchase in terms of an investment or not, it's a good idea to consider the property's resale potential. If you have an eye on a new or emerging hot market, this could definitely result in a great investment that'll have the capacity to produce big gains. But, if you want to play it safe, investing in an already popular and established neighborhood is certainly smart.
As you continue your hunt, factor in distinguishing features that'll help you market your condo when it's time to sell. Such features could be a garden, a private outdoor space or a view. You want to have something that sets you apart. Of course, luxury items that stand strong with the latest trends always have appeal. Today, such feature might include granite countertops and Viking, Bosch or Sub-Zero appliances. Know what niche you can appeal to when it comes time to sell and you'll be confident in the purchase and investment potential of your condo.
Another consideration in your condo search may be to invest in a solid "brand name". There has been a trend towards more high-end projects being built by well-known designers and architects. Investors, and especially foreign investors often follow particular developers and so create a particular high-end niche demand. In Beverly Hills the Pritzker Prize winning architect Richard Meier is designing a luxury development that's to be first of its kind in L. A. It's a luxury world class complex that will meet LEED Gold rating standards (Leadership in Energy and Environmental Design). These and other such cutting edge projects are sure-fire investments in today's international market.
So far we've focused mainly on condos in terms of investment, but let us get back to the idea of you living there for a while. What do you need to know about the development? Consider that with a condo you're not only buying a set square footage of space, you're also buying into a relationship with the condo owner and the condo association. The association is crucial toward the maintenance and protection of your condo's value. The association's repair fund is there to cover ongoing costs, upgrades and building insurance and so it's important that there be ample funds in that pot.
You'll also want to go over the last few years of minutes from the condos association's meetings and just check into the kinds of issues, gripes and complaints that have arisen. Of course, some arguing is normal, but an association that is in constant conflict may not be something you want to deal with- and invest in.
Next, make sure you fully understand the break-down of your condo fees. They're set in direct proportion to the cost of maintenance and the level of service demanded by the condo association. These fees can be higher or lower between neighboring condominium developments; and lower isn't always better! It all depends on what those fees cover, and whether or not the set-up suits you. For example, some condo fees include utilities, but if you're not going to be home often, or are just generally more conscious about utility use, you may not want your fees to be utility inclusive. Monthly "fees" can also be higher when a condo corporation has recreation facilities to operate such as pools, saunas and exercise rooms. You need to know what you want and need out of your condo community and what you're willing to pay for in your monthly fees. Don't shy away from higher, yet reasonable, condo fees. They could indicate you're looking at a well-run development, with a board that's not afraid to charge what it costs to do the job right.
