Re: Newbie questions about condos/townhouses - Posted by Scott Sayles
Posted by Scott Sayles on June 03, 2004 at 16:54:00:
it might sound cliche, but there are no bad questions. There might be some variation from state to state but here’s the general answer to your question as it applies in California.
condominium and occassionally townhouse communities have what is called a Home Owners Association (HOA). when you buy a property inside the community you are obligated to pay your association dues in addition to your individual property expenses. These dues are not tax deductible. They cover cumulative maintenance and management costs of the community. From time to time there can be special assessments for things such as upgrades,major repairs,or unforeseen problems. The cost is usually divided among all property owners and there are several ways to spread out the bills. They might finance the cost as a group or pay for it up front and bill property owners accordingly.
if you have plans to remodel or modify your individual property they will have to be approved by the associations management. Each community has rules called conditions, covenants, and restrictions (CC&R’s). If you purchase a condo you can request a copy of the rules from the title company.
As for investing, compare the time it would take you to find properties on your own vs. the cost of using a realtor. if you are going to you go after FSBO deals, do a thorough amount of research and learn to protect yourself before attempting a purchase. It would even be sound advice to use a realtor or more experienced investor for the first one or two deals before attempting it alone.
good luck and happy hunting.