Whether for a primary residence or investment, buying a condominium can be a great way to own property without having to worry about all the upkeep that single-family homes can bring.
It can also be a less expensive route to investing in an area with high real estate values, such as the red hot property market of Northern Virginia. Since Amazon announced its intention to base its headquarters in Arlington, Northern Virginia in 2018, the greater DC area’s real estate market has gone from strength to strength. Initially, demand outweighed supply causing a surge in prices, but now, an influx of new listings are bringing some balance back to the market – leaving Northern Virginia still very much ripe for investment.
What is a condo?
Condo is short for condominium, which is a single unit within a complex of properties, most often within an apartment-style building or community. It could also be one of many units within a shared building structure, such a high-rise building. Ownership relates to the individual unit only, with shared use of the common areas and amenities. These can include gyms, playgrounds, parks, pools and other public spaces. These shared areas are often managed by a group called a condo or homeowners association.
Typically, a condo owner holds the title to their individual condominium unit and shares ownership of the common areas, entering into an agreement to pay an established monthly fee towards the maintenance of the shared spaces and amenities.
Here is a checklist of tips for buying a condominium in Northern Virginia.
1. Consider the lifestyle implications
Living in a condominium environment is distinctly different from the lifestyle of suburban, single-family home or townhouse living. The upkeep of running and maintaining a typical family home can be significant and unforeseen costs can be high. That said, the idea of owning your own back yard may hold the greatest appeal. It may be extremely unappealing for you to consider the idea of sharing walls, ceilings and floors with neighbors. Condos certainly tend to fit best with those who enjoy apartment living.
When it comes to Northern Virginia, the steady increase of employment that Amazon is facilitating has bolstered the need for the convenient, low maintenance living that condos provide. From an investment perspective, condos in superior business locations or with easy access to metros for commuters is favored.
2. Find a Realtor with local condo experience
Condos can come with a history of issues that you may not be privy to without the guidance of a local expert. Community finance issues and structural problems within the community’s buildings are just a couple of examples of the kind of property information that you want to know as a prospective buyer.
Your Northern Virginia agent should have comprehensive knowledge of the condo developments in your area of interest and what issues may be present. The right agent should be able to advise you of any acrimony that has occurred over community issues, as well as which developments have held or increased their resale values. They can also guide you through important steps, like reviewing condo association documents.
3. Consider which amenities hold the most weight
Obviously, if you are looking for a condo to reside in, you know which amenities are the most attractive to you. That said, don’t overlook the bigger picture – a swimming pool, for example, may not be something you plan to use yourself, but may very well support the resale value in comparison to other developments without such broadly attractive features.
4. Find a finance-friendly development
Condo mortgages can be a little harder to get approved, as the development itself will be scrutinized along with your personal finances.
The FHA provides a list of approved condo developments on its website. Conventional lenders will often have requirements similar to that of the FHA, but the best approach is to find an experienced mortgage expert with condo experience to assist you in finding the right financing for your investment.
5. Review the association’s regulations and fees
Along with your finance, you’d need to service regular association fees, so it’s imperative that you do your due diligence regarding this. Review how much they are and what is included – typical coverage includes snow removal, common area cleaning, lawn care, etc.
As a part of your discovery, be sure to ask about any special assessments – there are extra charges that may be temporarily imposed to fund a specific project. A well-run condo association can usually avoid the need for special assessments, except in unusual circumstances. Request a copy of the association’s financial reports for your accountant or lawyer to review for added peace of mind.
As forecasted, the delay in condo inventory hitting the Northern Virginia market (due to COVID-19) saw a surge in listings as 2020 closed out and this should continue to drive values down somewhat in the coming months. If you are seriously considering investing in a condominium in Northern Virginia, we may very well be heading into a prime time to strike.