What You Should Know Before Buying a Condo

In the condo market, you may find once-in-a-lifetime deals for your personal or business investing endeavor. But you can also find trouble – especially if you do not ask the right questions. It is important that you do your homework if you do not want to watch your dream of owning a condominium turn into a nightmare.

Condo apartment flats

Ideally, you should be looking for a stable community, such as those found in Property Guru rumah sewa or any other communities and if you notice any issues, just say no. If prices are great, you are making a good investment, but you have to make an informed decision. To do this, you need to implement a few strategies that will help you see a good deal.

Be Sober

Some of the deals out there are tempting, but you need to think of purchasing your condo as a business transaction with the owner of the project. And like any other business investment opportunity, take time to learn how the place is managed and dig further into its financial stability. In a volatile economy, you need to be especially careful and avoid getting emotional about purchasing a condo.

Ask for Copies of the Budget

Many condo-would-be owners never think about it, but you need to have a copy of the condominium management budget. The management team may not normally hand out their budget, but they may consider providing it to a potential buyer when asked. What you should be looking for is the outstanding debt owed to the management company and percentage of condo owners not paying their dues.

If you are making cash purchase and not planning on selling your condo unit anytime soon, the delinquency figures may not matter much. However, remember that the company does not have enough money and it will be forced to cut maintenance services or amenities offered. Depending on the delinquency levels, that beautiful pool you admired once you stepped into the complex may not be there for long. Sometimes, such cash strapped companies may opt to charge condo owners special fees to make up for the shortfall in the budget.

The Reserve

The lesser money the condo company has and the older the building is, the higher chances of owners within the building paying a special assessment fee at one point or another in the future. Some condominiums put aside a certain percentage of their annual revenue to cater for emergencies or/and capital expansion.

Insurance

A critical consideration that you should not overlook is whether the community has insurance coverage. Sometimes, condo management teams may choose to drop insurance coverage to reduce the costs. However, such a move jeopardizes the investment you make. Before you purchase a condo, always make sure that you get a copy of the building’s master insurance policy. Consult with your own insurance agent and find out if it is enough to cover your unit. Insufficient coverage puts your own investment at risk.

Know Your Location

You may already have a good idea of where you would like to settle, but before you sign on the dotted line, be sure to look into the condo building’s proximity to relevant amenities like schools, transport and grocery stores. Some resources are available to you, for example, those that are listed in Property Guru rumah sewa search results.

Ask for Upgrades

If you are shelling out a sizeable amount of cash for a pre-owned condo, do not hesitate to ask former owners to include upgrades before you finally move in. If purchasing pre-constructed, it would be wise to invest in the right upgrades from the beginning. You will realize the benefits later.

Thoroughly Assess the Building’s Overall Physical Condition

While some faults are easy to spot, others are hidden. Hire a home inspector to assess the building and prevent lots of headaches later. Another option is to bring along an experienced friend or advisor.

Watch Out for Occupancy Fees

There is that period between you taking occupancy of your condo and the building is officially registered, you may be required to pay an occupancy fee (sometimes known as phantom rent). While unavoidable, the period is shorter as you move up to higher floors and experienced developers.

Other Questions

  • How are condo fees determined?
  • What are the boundaries of your unit?
  • Are windows and doors part of your unit?
  • What are your maintenance and repair responsibilities?
  • In case of a pipe leakage, whose responsibility is it to repair?
  • Should you consider getting extra insurance?
  • Is there a shared facilities agreement in place with another property or condominium?
  • Are there commercial units within the building?
  • Do the condominium rules, by-laws and declaration suit your lifestyle?
  • What does the condominium’s master insurance cover?

Before you buy that condo unit, you will require the advice of an accountant, real estate agent or lawyer to help you see the full picture. Discuss the concerns above as you review the condominium’s rules with a professional to make sure that the decision you make is the right one.

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