Q: Does a condo look like an apartment complex?
A: Not necessarily. In the south, we often see attached town homes owned as condos. In other parts of the country, like Manhattan, we think of older apartment buildings, like we saw in the show “Seinfeld.” They call theirs “co-ops,” but they are very similar to our condominiums in Georgia
Q: Are there any benefits to a condominium form of ownership?
A: In my opinion, condos have several major advantages:
— Economies of scale: It’s a lot cheaper for 100 unit owners to hire one company to keep the lawn mowed and the flowers planted than it is for 100 different people to try to do it on their own. It’s a lot cheaper for 100 homeowners to pay to have a pool open all summer than it is for each owner to have his own pool. There are many areas in which joint ownership results in reduced costs.
— Enforced exterior maintenance. In a condo environment, the association of owners is almost always responsible for all exterior maintenance. That includes streets, grounds, grass and shrubbery, and all exterior building maintenance. As a result, the community tends to always look good. You, as a member of the association, are forcing your neighbors to make the place look great, whether they want to or not. And that’s important to sustaining property values.
— Amenities & Location: Because of condominium density, you may be able to afford a great location with amenities you might not otherwise get, at a price you can live with. A detached house in Buckhead with a pool and a clubhouse might cost 3 million dollars. However, a condo with the same amenities in Buckhead might only cost three hundred thousand bucks.
Q: Are there any negatives associated with condominium ownership?
A: I would rather say there are definitely things you should know before you buy.
When you buy an ownership interest in a condominium, you need to understand that you are giving up a significant number of rights you typically have when you buy a traditional house.
For starters, you don’t get to decide what the outside of your unit looks like. You can’t paint your unit a different color, you often can’t place a grill or even a large potted plant on your balcony, and in many cases, you can’t even decide what color interior curtains you can have. These decisions are almost always made by the Homeowners Association, which is a “club” made up of all the owners.
Q: Is that a problem?
A: Hopefully not. But if you want to display an American flag, or if you want to plant geraniums on your balcony, or if you want to put a barbecue grill outside your backdoor, you may run into trouble.
And if the Association decides to save some money by delaying maintenance or flower planting or exterior painting, the whole community can suffer, which includes you, and there is almost nothing you can do about it.
Q: Are you saying that it’s better to not buy a condominium?
A: No. I am saying you need to have a clear understanding of how a community operates before you can make a safe decision as to whether or not the condo is right for you.
My advice is this: if you’re thinking of buying into a condominium community, know that you are giving up some of your individual rights. And please understand, in advance, what rights you are giving up to the homeowners association. That’s not necessarily a negative, and it may be a good thing, but it’s a fact.
Talk to other owners before you buy, talk to the association officers about important issues of the condo, and talk with your real estate professional about your alternatives before you make a final decision.
Native Atlantan John Adams is a real estate broker, investor, and author. He answers real estate questions every Sunday at noon on WGKA-am(920). He welcomes your questions and comments at Money99.com, where you will find an expanded version of this column, along with additional resources for landlords and renters.