The pandemic has truly caused much headache for Bay Area dwellers. A rush of residents moved out of the Bay Area last year, some returning to their home states and some fleeing to less expensive cities. Because of this, many condo units went on the market. Veteran renters snatched up condos and became first time homeowners. But, is a condo the right type of property for you? If you are considering a condo in the Bay Area, here are the top 5 things to consider.
There is someone above you
Some people like being in a condo because they will have neighbors, an abundance of amenities, and it is low maintenance compared to a single family home. However, you have to keep in mind that unless you are in a corner unit, you will be sandwiched by neighbors. And, if something happens to your neighbors, you may be impacted as well. For instance, the unit above yours may have a kitchen fire, the fire sprinkler may therefore be activated. Unless your condo is right across the street from the fire department, it will take at a minimum of 10 mins for firefighters to arrive and stop the sprinklers. One should not underestimate the amount of water that can come out from the sprinkler in that time frame. It’s enough to put out the kitchen fire AND seep through the floors to cause damage to your ceilings, lighting fixtures and walls.
Case and point, there was a house fire in a unit above one of our managed units. The firefighters had to break down the door to our vacant-at-the-time unit in order to inspect it and make sure that there weren’t any residual flames inside. Yes, the insurance company will cover the cost of the water damage, mold remediation and replacing the front door. However, just imagine the hassle you’d have to endure due to an issue caused by a neighbor.
No AirBnb in most condos
If you plan to use the property solely as an investment such as AirBnb or VRBO, there are certain rules and regulations around that. Most condo HOAs do not allow rentals for less than one month and this can severely limit your guest/tenant choices. You may be buying a condo as a primary residence, but if you like traveling, it’s nice to have the flexibility to rent it out for short term stays.
Don’t even think about cheating. It’s really easy for the HOA manager or board member to go onto these short term rental sites to catch your listings! Before you know it, you will get fined for violating community regulations.
HOA litigation may impact your ability to sell
The HOAs have power to oversee a lot of things and because of this reason, they often get into quarrels with residents, board members, and contractors. At times, these disagreements can result in lawsuits. While that may not directly affect your ability to sell your property, your potential buyers may find themselves denied by some banks. Why? Because banks don’t lend money to buyers looking to purchase properties with existing litigations within the HOA.
For buyers, having fewer banks to choose from often means that they will likely have a higher interest rate. So, then it is a choice between buying a different condo without litigation or a single family home. I think it’s safe to assume that the buyer will turn to these choices. That means fewer buyers will want or can afford your condo and it inevitably hurts the offers you will get.
Limited possibility to add value
Comparing to owning a single family home, as a condo owner, you have a lot fewer choices when it comes to adding value to your property. Single family home owners can add square footage to the property by converting a garage into livable space, building a sunroom, or even adding a second story. As a condo owner, you are limited to only changing the inside of your unit, such as kitchen and bath remodel. In most cases, you can’t even install a cool front door because the look of the front door has to be approved by the HOA.
If DIY home improvement is a hobby, buying a condo won’t provide you nearly as many project opportunities as a single family home. On the other hand, if you aren’t into DIY projects and just want a simple home that works, condos can be a good choice.
Your hobbies may be restricted
Speaking of DIY hobby, we can’t ignore the fact that many buyers may have hobbies and habits such as playing musical instruments, gardening and smoking.
Since you will be in close proximity with your neighbors, the hours that you’re allowed to play musical instruments will be limited. If your musical instrument is small and movable, it’s possible that you can reserve a conference room or club house to play it. You may be out of luck if piano is your thing.
Balconies associated with the condo unit you buy is often considered an “exclusive use common area”. That’s a mouthful way of saying, “you don’t own the balcony, you just have exclusive use of it.” There are pros and cons for this arrangement. The pro: if you don’t own it, the repair bills will be picked up by the HOA. The con: the HOA has rights to impose what you can and cannot do on the balcony.
“Now, why is planting a problem? Can’t I put plants on my balcony?” you may ask. The answer is “yes” and “no”. While it is allowed to put up a few plotted plants, the HOA may have rules on how much weight you can put on the balcony. This is a good restriction to have because the more plants you put on it, the more likely the wood decks will be damaged by water and develop dry rot. Given that people actually got killed in balcony collapsing incidents, you should think twice before making your balcony an oasis.
If you are a smoker, there is another restriction you should watch out for. Because second hand smoke can spread to neighboring windows and balconies, you probably won’t be allowed to smoke on your balcony, or any other common area. You will only end up smoking in your own unit and trigger the smoke detector every now and then, which is not fun either.
If you are on the fence about purchasing a condo and have a specific question, shoot us an email at team@thecalagents.com. Our brokerage is located inside the Bridgwater community in the heart of the East Bay and we have come across all of these scenarios in real life.
