5 TIPS FOR CONDO OWNERS

Affording a condo is a reality that most first time home buyers learn. Yes, it’s a dream to own that 4 bedroom, 2,500 square foot home. But the reality is in today’s market, a young family can’t afford that big beautiful house with the white picket fence. So the next best option is a condo. A condo can be a great first investment. Here are 5 tips for Condo Owners.

1. Understand your HOA

HOA’s are designed to protect the association.  They consist of an the unit owners, an elected board of directors, and the property management firm. Understanding your HOA, and what your fees go towards, is imperative to know before deciding to buy in that community.

2. Steps to take when renting unit to others

Condos are a great way to own a 2nd property to rent out. A.lot of.ypur.neighbors probably aren’t the unit owner, but a tenant. Tenants statistically are not as responsible as home owners are. Taking extra precautions to protect your biggest asset should be a priority. Limiting your exposure to being sued can be circumvented by requiring your tenant to purchase a renters insurance policy. This policy protects you from having to use your insurance. Also if their renters insurance is not enough, your condo policy becomes secondary to back it up.

3. Do your research

Every HOA is different. Different management strategies, fees, liability, and amount of reserves.  Do your research to understand what kind of finances the HOA has, along with the amount of claims on the association. If there seems to be an extraordinary amount of past claims, signs can point to a lack of due diligence in risk mitigation.

4. Get involved!

It’s important to know what’s going on in your HOA. Understanding the maintenance contracts,  Insurance, and what the plans are going forward. Being on the board, or attending board meetings allows you to be the voice for you and your neighbors.

5. Master HOA insurance coverage

Your association is insured under ypur Master HOA policy. It’s designed to protect the HOA from lawsuits, and also catastrophic claims like fires and water damage. This coverage is very limited and does NOT protect the individual unit owner fully. It’s always recommended the unit owner mainatain their own HO-6 policy. This protects your unit from the walls in, along with additional building coverage. This coverage is intended for.large claims. But what about your personal belongings? Your furniture, electronics, clothes etc are not covered under your Master HOA policy. So if there is a fire, flood or theft, and your belongings are destroyed, you have no coverage. HO-6 policies cover you specifically.

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