Owning a condo in Los Angeles County’s most iconic coastal communities is a dream come true for those who want to experience life by the ocean. But before you sign on the dotted line, here are some questions to ask.
- How long do I intend to keep it?
Condos typically appreciate slower than single-family homes, and depending on the temperature of the market, it could take five years or so for you to recoup closing costs and make enough of a profit from the sale.
That’s why it’s important to ask yourself how long you intend to hold onto the condo. If you see yourself relocating within the next five years, it’s best to hold off on your purchase.
- Am I aware of all the fees involved?
Get a breakdown of the monthly fees you’ll have to shoulder as a unit owner. Examine your finances to determine if you can afford these fees, and make sure you truly understand what you’re getting in return for your monthly payments.
One of those fees would be your condo association fee, which is calculated based on the number of units in the building, short-term and long-term costs of maintaining the property, the amount set aside for the repair fund and litigation costs, and fees for professional management.
Unlike your mortgage fees, condo association fees are not tax-deductible.
Take a close look at the condo’s repair fund. As mentioned earlier, the condo association sets aside a portion of the amount it receives for major repairs.
- If the development has been around for less than 10 years, the repair fund ought to set aside 10% of the cost to repair major items like roofing, amenities, and so on.
- If the development between 10 to 20 years old, the fund should have 25% to 30%, if not more, set aside for major repairs.
- And if the development is more than 20 years old, 50% should go towards the repair fund.
Be wary of condos that offer buyers ultra low fees. This could seem appealing, but it could also mean that the association isn’t building up their repair fund. In the event that something major like the roof needs replacing, you and other unit owners will have to pick up the expensive tab.
Do research on the delinquency rates on monthly condo dues. When unit owners consistently fail to pay their dues, everyone else will have to pick up the slack. A good community will typically have a delinquency rate of 15% or lower.
- What are the building rules?
Make sure you read the community rules word per word, and determine whether your lifestyle is aligned with the policies. Important rules affecting your usage of the condo include:
- Whether or not pets are allowed
- Whether you will be permitted to rent out your unit
- If you will be allowed to cultivate a garden or flower bed
- What are my responsibilities as a unit owner?
One of the biggest perks of condo ownership is low level of maintenance required. In many cases, the association takes care of external maintenance like yard work and paint jobs in exchange for a monthly fee. This applies to “common elements” or areas and features that all residents use, such as the stairs, elevators, and hallways.
However, you may be responsible for maintaining everything that’s part of your unit. So it comes down to what exactly the association considers to be part of your unit, which should be stated in the Covenants, Conditions & Restrictions (CC&Rs). This usually covers features like:
- Floors and ceilings
- Interior walls
- Windows and doors
- Private balconies and patios
- Permanent fixtures like cabinetry and sinks
- Electric, plumbing, and air conditioning systems
- Is there enough storage space?
Condo units are unlikely to have additional storage like an attic or a basement, unless they’re structured like townhouses, so find out if the development offers personal storage space where you can keep bikes, surf boards, and other bulky items.
- Is there any past or pending litigation on the property?
Some developments have more than their fair share of legal drama. Unit owners can sue other owners, the condo association, or the developer. Find out if there are past or ongoing litigation on the condo, as it’s often a sign of a poorly maintained and disharmonious community.
- What are the most common complaints?
Request the minutes of the meeting from the last few months and talk to other unit owners to find out what residents’ gripes are, and how they’re handled. If management is slow to address issues, you should have second thoughts about making a commitment to live there.
Ready to own a condo in LA County’s most coveted coastal areas? 3 Leaf Realty is here to guide you through the buying process until you make your house feel like home. Call them at (310)546-6300 or send an email to Realtor(at)3LeafRealty(dotted)com.