Condos and Home Associations

Are condos a good investment?

Condominiums have held their value as an investment despite economic downturns and problems with some associations. In fact, condos have appreciated more in the past few years than when they first came on the scene in the late 1970s and early 1980s, experts say. While there are oodles of reports about homeowners association controversy and construction-defect matters, the industry has divulged to turn its appearance around. Chosen volunteers who who serve on the board are better equipped at handling complex budget and legal inquiries, for starters, while numerous boards go to excessive lengths to keep away from the kind of protracted and expensive lawsuit that has burned the resale value in the past. At the same time, adjusting demographics are rendering condominiums more appealing investments for single homebuyers, empty nesters and first-time buyers in higher end markets.

What kind of rules do Homeowners association require?

Typical covenants, codes and restrictions (CC&Rs), which control condo associations, give the board power to make and enforce reasonable rules for use of the common area. But that would not apply to interior spaces owned by smokers themselves. A homeowners association's board of directors can restrict smoking areas if it applies to indoor common spaces such as hallways or entertainment rooms. Outdoor spaces are an another story, say legal experts. All rules hang on what the local law permits (i.e. if a city banned smoking outdoors, a homeowners association probably could limit smoking in its outdoor spaces). The 1990 Americans with Disabilities Act does not force strictly residential apartments and single-family homes to be made accessible. But all new construction of non-private accommodations or commercial projects (such as a government building or a shopping mall) must be approachable. New multi-family construction is within this category too. In all the different states, the Federal Fair Housing Act allows insurance against partiality for customers with physical or mental disabilities. Discrimination includes the denial to make sensible modifications to structures that aren't available to the disabled.

Some of the costs involved in having a home owner's association are:

Condo and town home owners pay a set amount monthly, to the homeowner's association to care for the values of managing and maintaining all common areas.

As well, you may pay extra assessments occasionally for crucial maintenance projects.

In review these must be voted on by the association board and sometimes even the owners.

The particular costs vary greatly from each association for monthly or annual amounts.

When looking at a town home, it's a possible idea to intently research the fees and bylaws of the condominium association.

Your home owners dues may be tax deductible.

Homeowners association expense are considered personal living expenses and are not tax-deductible. But also, an association has a certain assessment to make one or more capital betterment, owners might might be able to add the price to their cost basis. Cost basis is a description for the funds an owner spends for fixed improvements during their time in the unit and is used to decrease eventual capital gains taxes when the property is sold. For example, if the association builds up a new roof on a building, the cost could be taken into account part of a condo owner's cost basis only if they lived literally underneath it. Total improvements to common areas, similar to the installation of a sauna, need to be clarified on a case-by-case basis but a large amount can be contained in the cost basis of any owner who can verify their home directly benefits from the work.   

How much can I expect to spend on maintenance?

Experts generally agree that you can plan on annually spending 1 percent of the purchase price of your house on repairing gutters, caulking windows, sealing your driveway and the myriad other maintenance chores that come with the privilege of homeownership. Recent houses will cost less to maintain than older homes. It also hinges on how well the structure has been maintained over the years. Some of the repairs and improvements necessary to list your home If you want to get top dollar for your property, you probably need to make all less important repairs and selected major repairs before putting it on the market. Nearly all purchase contracts insert an inspection clause, a purchaser contingency that allows a buyer to back out if a multitude of defects are found or negotiate their repair. The theory is not to overspend on pre-sale repairs, especially if there are not many houses on the market but most customers prepared to buy at just about any price. But also, making such repairs might be the one and only way to sell your residence in a down market.

Can poor neighborhoods lower house values?

While also it may not decrease the actual value, a poor landscape next door can take away from the better aspects of your home. Inspect your local laws, which should be on file at the public library, county law library or City Hall. A regular "junk vehicle" ordinance, for starters, makes any disabled car to either be enclosed or placed behind a fence. And several cities prohibit parking any vehicle on a city street too long. Also it might be worthwhile to check into local zoning laws. An operator of a home-based business mainly is vital to construct a variance or fixed zoning change in residential areas. Additionally, if a neighbor's repair work creates loud noises, he may be breaking local noise-control laws, which are enforced by the police department. Before including the authorities, you may want to make a copy of the vital law and post it to your neighbor to give them a chance to perfect the quandary.

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