7 Things to Know Before Buying a Condo in Ann Arbor

 

7 Things to Know Before Buying a Condo in Ann Arbor

Condo living offers convenience and ease for many people, with benefits like lawn care and structural maintenance taken care of by the association. However, there are crucial factors to consider before making a purchase. My name is Daniel DeCapua, owner of the Spotlight Home Team in Ann Arbor, Michigan, and welcome back to our blog, where we delve into all things real estate in Ann Arbor. Today, we're focusing on condo living and here are seven essential things you should know before buying a condo in Ann Arbor.

1. Assess the Financial Health and Governance of the Association

When you buy a condo, you're not just purchasing your unit; you're joining a community with shared responsibilities. It's vital to check the association's budget and financial statements. Look for reserves to be at least 20% of the operating budget. This ensures you won't face unexpected assessments due to a lack of funds for major repairs. Make this part of your offer to purchase to avoid future financial surprises.

2. Understand the Bylaws

Bylaws might seem mundane, but they are crucial for understanding your responsibilities and what's covered by the association fees. These rules outline everything from maintenance responsibilities to amenities included in your fees, such as pools and gyms. Don’t assume that items like porches, decks, and windows are covered—often, they are not. Review the bylaws thoroughly to know exactly what to expect.

3. Check Rental Rules and Caps

If you're considering renting out your unit or buying as an investment, be aware of rental rules and caps. Many condos have restrictions to prevent the complex from becoming predominantly rentals. These can include rental caps, limiting the number of units that can be rented at any time. Understanding these rules is essential if you plan to rent out your condo.

4. Spend Time in the Condo Complex

Take time to hang out in the condo complex. Talk to residents and listen for potential noise issues, especially if you're considering a lower unit. The last thing you want is to be surprised by noisy neighbors or clanging garage doors after moving in. This firsthand experience can provide valuable insights into daily life in the complex.

5. Be Aware of Maintenance and Potential Assessments

Your association dues cover maintenance and improvements, but unexpected issues can lead to assessments. Before making an offer, ask about any pending assessments. This can save you from unforeseen financial burdens. Review past assessments and obtain the most current association meeting minutes. Discussions of large-scale improvements could signal upcoming assessments.

6. Check Pet Restrictions

If you have pets or plan to get one, check the pet restrictions. These can range from weight limits and the number of pets to outright bans on certain animals, such as dogs. Understanding these rules beforehand will prevent any unwelcome surprises after you’ve moved in.

7. Understand Warrantable vs. Non-Warrantable Condos

Financing is a critical consideration, specifically whether the condo is warrantable or non-warrantable. Warrantable condos meet criteria that make them eligible for financing by Fannie Mae or Freddie Mac, making them easier to finance and more attractive for resale. Non-warrantable condos might be harder to finance and could affect resale value. Check the warrantability of the condo you're interested in to avoid potential financing issues.

Condo living has its perks, but it comes with unique considerations. From assessing the association's financial health to understanding the community rules, taking these steps will help ensure your investment is sound. Whether you're a first-time buyer or looking to add to your investment portfolio, being informed is key.


Posted by The Spotlight Home Team on
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