Home Buying and Selling: Is Condo Living for You?

moneyinstructor.com

Despite the allure of maintenance-free, amenity-rich living, condominium ownership is not for everyone.  Before you join others who have chosen to live in this community arrangement, consider the following factors that come along with it.

Sharing is Required
As a condominium owner you share common walls with your neighbors.  The number of walls you share depends on the architectural style of your condo complex and where your unit is located within that complex.  You could share walls with neighbors who live on either side as well as above or beneath you.  In addition, you share ownership and use of common areas and amenities.  Examples of common areas include hallways and exterior walls.  Available amenities vary with the complex and can include clubhouses, gyms, swimming pools, security guards, and more.  These common walls and areas are reminiscent of apartment life.  This may not be an issue for some, but if you are accustomed to living in a single-family home, living in proximity to others and sharing space may require adjustment.

Space is Fixed
Whatever square footage you have when you buy is what you will have until you move elsewhere.  Unlike a single-family home where you can build a room or other addition as long as you have available land and appropriate permits, a condo stays as is.  Remember what you own is the interior of your unit.  You do not own the land beneath the building.  And because you share walls, building an addition is restricted.

Appreciation is Variable
As with any home, value appreciation is influenced by the area where you live.  In some locations, especially where land and home prices are at a premium, condominium values hold their own and even rise.  Generally speaking though condominiums can be among the first properties to experience stagnant or declining appreciation if the economy takes a downturn. In a sagging economy and also in a buyers' market -- one in which there are more homes for sale than there are willing buyers -- home prices tend to rise more slowly and may fall.  This makes single-family homes more immediately affordable, and those who typically would have purchased a condo may choose a single-family home instead.

The Association Rules
The condo association, which is comprised of the homeowners, is responsible for maintenance, operation, and finances of the complex.  A well-run association can offer considerable convenience and benefits for owners.  On the contrary, a poorly run association can create headaches, hassles, and hardships.  You can expect to pay monthly association fees or dues that cover operating costs of the complex.  Those fees can be steep depending on the amenities offered.  You can also expect the association to make and enforce rules that are designed to maintain a harmonious look and feel of the complex.  Some associations have lots of rules.  Others have few rules.  Some rules are reasonable, and still others can be intrusive.  Rules govern everything from your number of parking spaces to restrictions on visitors.  As an owner, you are required to abide by all of the rules whether you like them or not.

Before You Buy
A few general rules of thumb when considering a condo purchase are:

• Meet the folks who would be your new neighbors.  Find out what they like or do not like about the complex and the association.
• Check out the financial solvency of the condo association.  You do not want to find out about financial difficulties and be presented with an unexpected significant fee after you move in.
• Get the facts on owner-occupied versus rental units.  A predominance of rental units can present challenges of its own.
• Learn about the rules.  Read the bylaws to gain a clear understanding of how the association is organized and what the rules govern.
• Read the master deed or have an attorney review it.

And of course as with buying any other type of home, research the neighborhood and get information on recent sales in the area.  Put all information learned together, weigh the pros and cons, and then make your purchase decision.

Information is for educational and informational purposes only and is not be interpreted as financial or legal advice. This does not represent a recommendation to buy, sell, or hold any security. Please consult your financial advisor.

Your Primer for Buying Condos, Co-ops and Duplexes

realtor.com
By: Anne Miller

So much real estate information focuses on the single-family home, but that’s not the only option for many buyers.

Not all apartments are created—or their buildings governed—equally, however.

This is what you need to know about condominiums, co-operative housing and duplexes.

Condos

Just like a single-family home, a condo owner runs his or her domain. A condo owner has a deed for the apartment, pays real estate taxes for the unit, and can rent out their unit if they wish.

Maintenance is a different story. Condo owners pay fees to keep up the grounds and the building (or buildings, for a larger complex). On one hand, you don’t have to mow the lawn every week. On the other, you help pay for someone who does. Fees can vary greatly depending on the building, the lands, and how well those in charge of the finances run the place.

A condo can be a good option for retirees or a disabled person who can’t manage a whole house. The relatively quick approval process for buying some condos makes it good option for young home buyers. If you’re interested in lots of personal space surrounding your home … well, you’ll share walls with neighbors.

In order to determine the market value of the condo, check the sales prices of condos of similar size, age, location—and those that have similar maintenance fees.

Also engage in due diligence when it comes to the finances. You don’t want to move in only to find the building needs multimillion-dollar fixes—and now you have to help pay for that.

Co-ops

A co-op is a non-profit company that owns and operates a residential complex. Buyers lease one of the building’s units by buying shares of stock in the building’s corporation.

Buyers have to go through a complex approval process, don’t own their apartment and don’t have ultimate control over to whom they can rent, sublet, or sell their property. If renting, you may have to present your potential tenants to the board for approval.

Mortgage or tax bills aren’t sent to the co-op shareholders but to the corporation. A monthly co-op fee includes the mortgage payments, taxes, maintenance and utilities. This cost is usually higher than condo fees. And they often require a larger downpayment than other options—but also often cost less overall.

There are financial advantages of co-op living—including substantial breaks on real estate taxes, transfer taxes and a recordation tax that occurs in real estate transactions. According to bankrate.com, co-op owners can deduct the maintenance fees from their taxes.

Duplexes

A duplex can refer to a residential unit attached to another, with a small yard to maintain. In some areas, like New York City, a duplex describes an apartment with two floors, in any kind of building.

(This is a prime example of doing your homework to make sure you understand differences in local real estate nomenclature.)

If you’re not ready to purchase a single-family home, a duplex or townhouse can be an accessible option. You could purchase a two-family house and rent out the second unit, subsidizing your own housing costs with a real estate investment. Depending on location, you may be able to qualify for publicly-funded home improvement costs.

If you decide to move out, you can simply rent it out. Your rented duplex will then be 100% rental property, while your expenditures on it are tax deductible.

Keep in mind, though, that your on-site living arrangements won’t offer you as much privacy as a single-family home. And you’ll have to learn how to play landlord—you’re responsible for not only your backed-up toilet but your tenant’s as well.

Other duplexes, especially in big cities, may allow for two families to each own in one small building. Splitting costs can get tricky. But you may get more space than you would in a condo, without the cost of a full house on your own.

Moving forward

Before you decide which is the best option for you, consider these basic questions:

• How important is privacy?
• Is owning your own property a priority?
• Do you need professional maintenance help?
• Do you have less-than-perfect credit which could adversely affect an easy approval process?
• Would you like the option of being able to rent, sublet, or sell the unit to whomever you choose?

Research all your options to gain a better idea about which type of housing solution is best for you.

Educate yourself as much as possible while seeking the advice of a professional real estate agent who can help you.

With knowledge, patience and determination, you’re bound to find the right home.

Updated from an earlier version by Mortgagematch.com staff.

When Choosing Your Condo, Don’t Forget to Check the HOA Fees!

topmexicorealstate.com

by THOMASLLOYD 

AUGUST 26, 2013

Now, it’s pretty much a given that some time before you sign the deed and take possession of your new condo in Mexico, you’ll find out how much HOA (home owner association) fees for monthly maintenance and use of common areas are.

However, my advice is this: check these fees sooner rather than later.

The last thing you want to do is spend a few weeks working out a deal, only to find out that the fees are much higher than you thought.

Let’s consider a few points pertaining to HOA/maintenance feels for condos in Mexico.

They are low – HOA fees in Mexico tend to be very low, simply because costs of materials and labor for maintenance are low.  In Canada a friend of mine recently was going to by a condo in Ontario as an investment.  He found the perfect property, only to find out that the monthly fee was $800 dollars!! That was more than his mortgage payment.  In Mexico, average would be around $150/200 USD, depending on the size of the common area, amenities provided, etc.

It could make a difference in choice – It’s a tough choice between condo A and B; you slightly prefer A, but it costs $10,000 more.  But as it turns out, the HOA fees in B are $150 more per month.  You can probably comfortably fork out that extra now for the savings in the HOA fees, especially since you prefer the property anyway.

Make sure you know what they include – This is a big factor.  Maybe a higher monthly fee includes a gym, sports facilities and discounts at the spa.  Or, on the other hand, maybe you’ll never use those things. Be sure to evaluate both possible savings a higher HOA fee could offer, and the likelihood that you’ll actually need those services.

In the end, HOA and maintenance costs will be one of the areas where you save considerably in Mexico.  At the same time, as anywhere else, it’s a factor you want to consider carefully.

Profeco Detects Fraud in Three Mazatlán Time Share Condos

by Maureen Dietrich

1 May 14

mazmessenger.com

 

To put an end to the bad image fraudulent time shares have given Mazatlán, a monitoring and assessment program will be created.

The Sinaloa branch of Profeco (federal consumer protection office) has pinpointed three condominiums selling time share fraudulently.

Profeco delegate, Jorge Alan Urbina Vidales, said following an operation conducted in the port during Semana Santa three condo projects selling time share accounted for 80 percent of complaints, some of which were lodged with the PGR for fraud.

The delegate told reporters his office will begin an investigation of the complaints in coordination with the Secretary of Tourism and the Procuraduría General de Justicia (PGR) and will apply the weight of the law against those time share companies defrauding tourists.

He advised that the three condo projects under scrutiny are Sábalos del Sol, Punta Pacífico (formerly La Joya) and Marina Grand.

The majority of these businesses, he said, present a contract to potential buyers outlining the buyers´ obligations and penalties. However, none of the contracts establish the responsibilities of the time share company. Nor do the companies post prices in plain view and they have been found to collect unauthorized payments from clients.

Many of the complainants are foreigners, the Profeco delegate said, and that is the image of Mazatlán and Mexico that they walk away with.

Fernando Alaniz Cárdenas, President of the Asociación de Clubes Vacacionales de Sinaloa, applauded the investigation into the “pseudo-developments.” He pointed out that none of the three time share developments accused of fraud is a member of his organization.

To put an end to the bad image fraudulent time shares have given Mazatlán, a monitoring and assessment program will be created in conjunction with the municipality, Sectur, Profeco and the PGR specializing in crimes against tourists with the objective of assisting victims in finding a solution in their cases.

Alaniz Cárdenas said they are not going to abandon tourists with this problem. Until now the complaints have been isolated and if the client does not check with Sectur or his association, they have no protection against fraudulent operations.

According to data from the Asociación de Clubes Vacacionales de Sinaloa, there are 4,000 time share units in Mazatlán.

(from Noroeste)

Spanish Plan Condo/Hotel Development in Marina Mazatlán

by Maureen Dietrich
 26 Feb 14
mazmessenger.com

 

Nearly $80 million dollars will be invested in a mixed condominium and hotel development with its own shopping center in the Marina Mazatlán, said Sinaloa Secretary of Tourism Francisco Córdova Celaya yesterday.

The Spanish company Fitur has purchased two hectares in the Marina area for the mega development with the plan to eventually sell the completed development to a well known chain.

Córdova Celaya said he met with the principals of the company last week and that they are in the process of doing a socioeconomic study and applying for permits.

 (from El Debate)

When Choosing Your Condo, Don’t Forget to Check the HOA Fees!

by ThomasLloyd on August 26, 2013

topmexicorealestate.com 

Now, it’s pretty much a given that some time before you sign the deed and take possession of your new condo in Mexico, you’ll find out how much HOA (home owner association) fees for monthly maintenance and use of common areas are.

However, my advice is this: check these fees sooner rather than later.

The last thing you want to do is spend a few weeks working out a deal, only to find out that the fees are much higher than you thought.

Let’s consider a few points pertaining to HOA/maintenance feels for condos in Mexico.



They are low – HOA fees in Mexico tend to be very low, simply because costs of materials and labor for maintenance are low.  In Canada a friend of mine recently was going to by a condo in Ontario as an investment.  He found the perfect property, only to find out that the monthly fee was $800 dollars!! That was more than his mortgage payment.  In Mexico, average would be around $150/200 USD, depending on the size of the common area, amenities provided, etc.


 

It could make a difference in choice – It’s a tough choice between condo A and B; you slightly prefer A, but it costs $10,000 more.  But as it turns out, the HOA fees in B are $150 more per month.  You can probably comfortably fork out that extra now for the savings in the HOA fees, especially since you prefer the property anyway.


Make sure you know what they include – This is a big factor.  Maybe a higher monthly fee includes a gym, sports facilities and discounts at the spa.  Or, on the other hand, maybe you’ll never use those things. Be sure to evaluate both possible savings a higher HOA fee could offer, and the likelihood that you’ll actually need those services.

In the end, HOA and maintenance costs will be one of the areas where you save considerably in Mexico.  At the same time, as anywhere else, it’s a factor you want to consider carefully.