First-time condominium buyers are often enthralled by the notion of a high-rise urban living. While it certainly is exciting, never lose your sight on an important aspect of dealing with reputable Philadelphia realtors: the finances. Here are some notes that can help you ensure that your condo remains a great investment:
Think Business
Research about the practicality of living in your condo (considering proximity to basic needs and job, transport, etc.) and ask yourself whether or not the monthly cost is worth it. New York attorney Rafael Castellanos has a very good reason why extra precautions must be taken:
“Especially in this economy, you really have to be very careful,” he says. “Don't be emotional about it.”
On Delinquencies
Ask the realtor or the seller to check the building or association’s budget; focus on the amount of outstanding debt and the number or percentage of residents who are delinquent in paying their debt. Delinquency is an important factor to consider because most lenders might think twice about approving a loan to someone who could soon be among these numbers.
Insurance
Bankrate.com advices that you have to check if the association is insured:
Berger says many condo associations are reducing or dropping the community's insurance coverage to cost cuts. The move jeopardizes the investment of all the owners in those projects.
"New purchasers should ask the seller to obtain a copy of the building's master (insurance) policy," she says. "Then take it to your own insurance agent and ask is this enough coverage.
Reserves
To put it simply, the higher the financial reserves of a condo association, the more stable it is, which then translates to less probability of the residents incurring financial obligations passed down by the condo association.
White Plains, New York's National Condo Advisors CEO, Orest Tomaselli, identifies another common mistake that aspiring property owners usually commit:
“Eighty (percent) to 90 percent of them do not have the appropriate reserves in their budget,” Tomaselli says, based on projects he has worked with, including existing and new buildings.
Do a comprehensive Philadelphia property search before you finalize the deal with your realtor, otherwise you might end up with a deal that bites you back long after you already have the unit. Efficient realtors like Joanne Davidow should help you find the right condominium to suit your needs as well as your financial status.
