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by Wade Russell

Created on: March 03, 2010

Condos are generally NOT a good investment, for many reasons.   When you look into purchasing a condominium you will be given a "common tenant" agreement by the realtor or condo.  This agreement notifies you that although you are purchasing a living space, you must share common walls with other tenants; meaning you have neighbors adjacent to you, usually on both sides of you, and many times above, below, and ou as well.  Because you live in such close proximity to other tenants, and also share opposite sides of the same walls, you are warned about becoming too noisy, or becoming a "nuisance" to other neighbors.  Well okay, this is not big deal for most of us, the majority of the time.  But what if your hyperactive grandson comes to visit for the weekend, ends up stomping around on the floor and yelling at his favorite video games while playing on his X-Box?   Well, you could be asked or required to move out, for this very simply explained and temporary event.   This may sound extreme, but yet it has been known to happen. 

Since you are sharing common walls with common tenants, you are also restricted in how to use fireplaces, barbecue grills, home stereos, TVs, and pets.  You may not even be allowed to own a pet.  Or, IF you are allowed to keep your little Lhasa Apso, "Bubba," and he ends up defecating on the neighbors little patch of grass, you will most certainly need to pick it up immediately or be fined from violating the condominium's pet owner doctrines.  But yet the fun with condominium bylaws does not stop here!  The fine print of  your tenants in common agreement will almost assuredly state that the condo's homeowners committee has the right to review and increase condo owner's maintenance fees once or twice a year.   So say for example that you will be required to pay $400 per month for condominium maintenance; this may include mowing the grass, repainting exterior surfaces, replacing outside lights, and maintaining the condo's community pool.   Okay, these are all things shared and enjoyed by all condo owners.   Yet, you may find that this fee goes up or even doubles, from year-to-year.  With this in mind, it becomes very important to understand when and how your condo maintenance fees may be increased. 

Keep a few other points in mind as well; say you want to paint the outside entrance door to your condo a nice, dark purplish color because you think it matches the style of your unit very well.   Well guess what?  You are probably not allowed to alter the outside appearance of your condo in any significant way at all.   Since condos are all attached to one another, the bylaws usually require that they be consistent in color and appearance to each other.   You may not even be allowed to barbecue on your own condo's covered patio, since many condos consider this to be a fire hazard.   You may be forced to barbecue only around the community pool area, if they have community barbecue grills at all.  

And now for the kicker; condominiums usually are no less expensive than buying a small house, yet you seldom have the rights and privileges of being an independent home owner.   And since newer and better condos are always being built, you may find that when you go to sell your condo you will end up suffering a loss in value, rather than an increase.    The news is not all bad, however.  For certain people, buying and living in a condominium makes a lot of sense.   If you are retired and want neighbors close by, while not having to suffer with mowing your own lawn or up keeping the exterior of your residence by yourself, then condos may make a lot of sense.  

If you require living very close to your work in a downtown urban area, then living in a condo may be a good choice for you also.   Yet, for the vast majority of the general public, condos do not represent a good investment or good value.   You pay as much as you would for a house, with few to none of be homeowner benefits.  And to top it off, you will probably have trouble selling it at an appreciated value, unless your condo is in Manhattan, New York.   So review your options wisely, and get the advise of several good real estate agents, your friends, family, and maybe even a good real estate lawyer before making your buying decision.   Your actions could have long-term consequences that are not always pleasant.

Learn more about this author, Wade Russell.
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