- Are one-bedroom
condominiums a good investment?
One-bedroom
condominiums historically have not been considered as good an investment as condos with
two bedrooms or more. But in high-cost markets, such as Manhattan or the San Francisco Bay
Area, one-bedroom condos have proven to be equally good investments. Helping that along
are changing demographic trends. With more single home buyers in the market today than at
any time in history, there is more demand for one-bedroom condos.
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- How do I figure out
the homeowners association?
Learn everything you
can about the homeowners association before you buy into a development governed by one.
The association's financial, political and legal conditions are very important to your
investment and quality of life.
When run properly, homeowners associations maintain the
common grounds and keep civility in the complex. If you follow the rules, the association
should not intrude on your privacy or cost you too much in association dues.
Poorly managed associations can drag down property values and
make living there difficult for residents. Start by studying the association’s
covenants, codes and restrictions, or CC&Rs, and find out if you can live by them. For
example, if the rules prohibit loud music after a certain hour and you like to play your
CDs late at night, this may not be the place for you. Don't move in thinking you can get
away with violating the rules or change them later because you may find yourself in
turmoil with determined neighbors firmly in control of the association board.
Find out all you can about the association's finances. Beyond
reviewing the budget, talk to the association treasurer and find out if dues are expected
to increase and if any special assessments are planned. Ask if special inspections have
revealed problems with roofs or plumbing that may cause a dues hike or special assessment
later on.
Call and meet with the association president. If you are the
type of person who despises intrusions into your private life and the president seems more
interested in gossip about the residents than maintaining the property, this may not be
the right condo complex for you.
Speak with residents to get their views on the association's
finances, its property manager, how it operates and any politics. Associations are
volunteer organizations with elected boards, like a mini-government, so politics can enter
the picture and spoil a good thing.
Lastly, take some time to understand how homeowners
associations are organized and how they conduct business. Like all real estate
investments, the more you know the better off you are.
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- How do you choose between
condos and single-family homes?
Using appreciation
as a measure, condominiums in some areas have been as profitable an investment as
single-family homes in the last five years. And in some markets, condos appreciated even
more, according to some experts.
While single-family homes have been the preferred investment
by home buyers, changing demographics are helping make condos more popular, especially
among single home buyers, empty nesters and first-time buyers in high-priced markets.
Also, the condominium community has worked hard in the last
few years to overcome image problems brought on by homeowners association and developer
disputes as well as all too frequent construction-defect litigation.
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- Are condominiums risky to
buy?
While condos never had the kind of
appreciation experienced by single-family homes in the go-go 1980s, most ultimately have
not lost value, say some experts. And with high prices in many urban markets and more
single home buyers in the market than ever before, the market for condos is strong.
As with any home purchase, you should do your homework about
the neighborhood or development before you buy. In the case of condominiums, it is
important to read the past six months of homeowners association minutes to see how
effective the board is and to learn about any possibly detracting issues (such as
protracted litigation with the developer).
The condominium community has worked hard in the last few
years to overcome image problems brought on by disputes and lawsuits. Associations are
becoming more sophisticated about property management and taking steps to prevent legal
problems and disputes.
Other resources:
- Community Associations Institute, 1630 Duke St., Alexandria,
VA 22314; (703) 548-8600.
- "The Condominium Bluebook," Branden E. Bickel,
B&B Publications, San Francisco, CA; 1993.
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- Do condos have to be
made accessible to the disabled?
The 1990
Americans with Disabilities Act does not require strictly residential apartments and
single-family homes to be made accessible. But all new construction of public
accommodations or commercial projects (such as a government building or a shopping mall)
must be accessible. New multi-family construction also falls into this category.
In all states, the Federal Fair Housing Act provides
protection against discrimination for people with physical or mental disabilities.
Discrimination includes the refusal to make reasonable modifications to buildings that
aren't accessible to the disabled.
Two educational brochures, "Housing Rights" and
"Discrimination is Against the Law," are available through the Department of
Fair Employment and Housing by calling (800) 884-1684.
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- Can condos ban smoking?
A homeowners association's board of directors can
restrict smoking if it applies to indoor common spaces such as hallways or recreation
rooms. Outdoor spaces are a different story, say legal experts. Any restriction would
probably hinge on local laws (i.e. if a city banned smoking outdoors, a homeowners
association probably could restrict smoking in its outdoor spaces).
Typical covenants, codes and restrictions (CC&Rs), which
govern condo associations, give the board authority to make and enforce reasonable rules
for the use of common property. But that would not apply to interior spaces owned by
smokers themselves.
Resources:
- Common-interest development brochure available free from
California Department of Real Estate, Book Orders, P.O. Box 187006, Sacramento, CA
95818-7006; (916) 227-0938.
- Various Internet sites specializing in common-interest
developments, such as those operated by the Community Associations Institute and
CIDNetworks.
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- Can a condo association
ban nudity?
Could you sunbathe in the nude on your
own balcony? Not necessarily. In a condominium development, a balcony is not considered
private property but common property assigned to your exclusive use but a common area
nontheless.
Covenants, codes and restrictions (CC&Rs) usually spell
out what activities can and cannot be conducted on common property. Some associations
prevent people from barbecuing on their balconies or hanging large plants from the
railings. However, the larger issue of regulating personal conduct is not so clear-cut. It
literally depends on what side of the fence you're on.
If the sunbather can be seen from a public vantage point --
not by someone who must climb a tree or peer through binoculars -- then the rule probably
would be considered reasonable, say legal experts.
Incidentally, there are places where nudity is tolerated but
again, only out of public view.
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- Are condos a good
investment?
Condominiums have held their value as
an investment despite economic downturns and problems with some associations. In fact,
condos have appreciated more in the last few years than when they first came on the scene
in the late 1970s and early 1980s, experts say.
While there are lots of reports about homeowners association
disputes and construction-defect problems, the industry has worked hard to turn its image
around. Elected volunteers who serve on association boards are better trained at handling
complex budget and legal issues, for example, while many boards go to great lengths to
avoid the kind of protracted and expensive litigation that has hurt resale value in the
past.
Meanwhile, changing demographics are making condominiums more
attractive investments for single home buyers, empty nesters and first-time buyers in
expensive markets.
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- Where do I get
information on condo association laws?
Resources:
- "The Condominium Bluebook" by Branden E. Bickel,
B&B Publications, San Francisco, CA; 1994; call (415) 433-1233).
- Community Associations Institute, Alexandria, VA; (703)
548-8600.
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- Where do I get
information on condos?
The major interest group
for condominium projects and other so-called common-intereset developments is the
nonprofit Community Associations Institute,1630 Duke St., Alexandria, VA 22314; (703)
548-8600. Also, check the Internet where CAI operates an informative site as does
CIDNetworks.
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