Buying Real Estate – What Can You Expect?

We are seduced by the dcor, the ambiance, the view, and other visual effects when we are buying a condo but we should really be checking something else that is not visual.

Often playing a very nondescript part in the whole process of choosing a condo especially for first-time condo buyers is the Home Owners Association or HOA. However, a very large part in using up your finances if you hit an unlucky situation after moving in can be played by the HOA.

By asking a few questions about the HOA, you will be able to avoid a surprise. One of the important factors would be ‘who is running the show?’ A professional management company is preferable, especially in a condo of any size when it comes to a very small condo complex that may be run by residents.

Professional management companies do charge for their services but since they will use the same company many times, these companies can often save this fee by obtaining lower quotes for repairs. There is also less chance of the company using their influence on resident votes, so they may be construed as more fair. To them, this is a business and so the HOA will run as such rather than as a part-time rush before each meeting is due.

Don’t forget to always ask to the rules of the HOA, the financial report, the by-laws and the minutes of the last several meetings. Make sure that they fit in with it since the conditions, covenants and restrictions (CC&Rs) will affect your lifestyle.

What the financial report will do is tell you if there are any big increases in the fees coming up, or if there are any ‘emergency’ fees due soon. This raises the important question, what will happen if there is a big emergency? Also, how is it paid and just how much money is in the HOA?

Hopefully, there will be approximately one third of the gross annual fees charged to all residents in the reserves since the maintenance reserves will also be important. A favorable minimum amount would be $4,000 per condo, although is manageable.

Another aspect that the HOA manages is the percentage of rental units allowable. Any more than 20% and the re-sale of the condos become risky since it is only passable if it’s under 20%. The reason why desirability is decreased is because most of the time, renters do not have the same respect for property. Mortgage companies are also aware of this and are reluctant to give out mortgages to high-rental complexes.

Once you have ironed out all these questions, you can consider whether you would like to get a professional inspection done. In these inspections, the common areas as well as the condo that you are interested in are included. When all of these precautions are in place, you will then feel more secure to go ahead and make an offer.

Let us show you the best Playa Del Carmen real estate for sale and guide you through the process of buying property.

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