Author Topic: What to ask when shopping for small-building condos and/or townhouses w/o HOA  (Read 755 times)

mskyle

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We're thinking about buying a home in the next year or so - our rent has gone up to where we're at the tipping point on the rent-to-own calculators, and we would like some amenities that we don't have in our current apartment (e.g. in-building laundry and a non-dirt-floor basement - nothing too luxurious or outrageous!).

We'd really like to stay in our neighborhood or an adjacent neighborhood, and a lot of the housing stock here is multifamily homes (mostly 2- and 3-family), many of which have been condo-converted.* So they have a condo association/board of, say, two to five people (or couples). What questions should we be asking of these small condo associations? I do have friends who live in these kinds of situations so I can ask them (I know some of them have had personality conflict issues with their neighbors, and even some non-payment of dues/assessments stuff). Some of the stuff I would want to know about:

  • rules on renting (including AirBnb)
  • state of cash reserves
  • state of roof/siding/driveway/other common areas
  • relating to the above - any assessments likely in the near future? to what extent do they rely on assessments vs. condo fees?
  • rules for use of the outdoor space
  • landscaping/snowplowing (or shoveling) philosophy (i.e. do they DIY/share the work or hire it out)


We also recently learned about some small townhouse developments in the next neighborhood - we went to an open house for a townhouse that has no HOA at all, even though it shares a wall with a neighbor (it was an end unit; many of the units share two walls) and is on a sort of private road/driveway (less than 100 yards long). As much as I would like to avoid having an HOA, several potential issues struck me with this house:

  • who pays for paving/snow-plowing the private way?
  • how does the cost of insuring a townhouse compare with insuring a free-standing SFH?
  • roof stuff - if the house next door has a bad roof, will that hurt our roof?
  • seems like we would have even less recourse if neighbors rented to difficult people than we would in a condo situation (although to some extent this is just a risk of living in a dense neighborhood, period)
  • but these must be solveable problems, right? cities all over the world have attached houses.


Anyway, any personal or expert advice would be welcome! We're still probably at *least* few months to a year away from buying, but we want to be prepared!



* I've considered buying a 2- or 3- family, but they seem to be going for only very slightly less than two or three condos - I don't want to pay a million dollars (even assuming we could afford it) for a property that would bring in $7500 in monthly rents (I think right now my landlords are collecting under $5000 a month on a property that's assessed at almost $1 million). Plus the areas where we're looking have nice residential tax exemptions where the first $200-300K is free from property tax.
« Last Edit: June 13, 2016, 10:12:38 AM by mskyle »

Mini-Mer

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I'm in a small complex, and hindsight is 20/20. 

- Savings philosophy - how are contributions to reserves made, how often, what have reserves been used for in the past?  (This will get at whether there is a savings plan, or whether savings are just a happy afterthought.  Also, some owners may want to tap reserves for any unanticipated expenses, and some will want to save for infrastructure issues.)

- History of special assessments (This may be a better sign of how they handle those than upcoming assessments, especially if they don't tend to plan ahead.)

- Decision-making process (Do they have frequent meetings? long email chains?  All members involved or just the Board?  For ex., our Board handles most issues.  Most of the other owners don't want to be bothered, but one gets irritated about not being consulted.  You also want to find out if they can make decisions, or if things slip through the cracks a lot.)

- Infrastructure maintenance plans (Do they have one?)

- Is there a professional property manager, and what is their role? 

- How are Board positions rotated, or are they?  Who handles day-to-day maintenance, finances, etc.?  (There's not going to be much rotation in a 5-person HOA, but has one person has been handling all the finances or all the maintenance for 5+ years?)