Like detached homes, condos are not for everyone. Judge for yourself how much the following drawbacks may affect you:

• Condominiums offer less privacy. Shared walls mean you can hear others more easily. Noise pollution is one of the biggest problems with condos and the one area that prospective condo buyers frequently overlook. Visit the unit at different times of the day and different days of the week to listen for noise.
  
  
• As a rule, the fewer common walls you share with neighbors, the more privacy you have in your unit. That's one reason corner units sell for a premium. And if your unit is on the top floor, you won't have people walking on your ceiling.
  
  
• Condominiums are legally complex. Prior to buying your condo, you should receive copies of three extremely important documents -- a Master Deed or Declaration of Covenants, Conditions, and Restrictions (CC&Rs); the homeowners-association bylaws; and the homeowners-association budget. Read these documents from cover to cover.
  
  
• Condominiums are financially complex. As a prospective owner, check the current operating budget. Be sure that it realistically covers building maintenance costs, staff salaries, utilities, garbage collection, insurance premiums, and other normal operating expenses. How much is adequate? Three to five percent of the condominium's gross operating budget is generally considered a minimally acceptable reserve.
  
  
• Where condominium parking and storage are concerned, the obvious isn't. For example, does your condo deed include a deeded garage or parking space that only you can use, or is parking on a "first come, first served" basis? Are there extra charges for parking, or is parking included in the monthly dues? Are there provisions for guest parking? Do you have a deeded storage area located outside of your unit? If you need even more storage, is any available and how much does it cost? Get answers to these questions before rather than after you buy.
  
  
• Some older buildings that have been converted into condominiums have outdated heating and cooling systems and may lack elevators. Find out whether utilities are individually metered or lumped into the monthly homeowners association dues. Does your unit have a thermostat to control its heating and air conditioning, or is it centrally controlled?
  
  
• If utilities are included in the monthly dues, other condo owners have no incentive to economize by moderating their use of heat or air conditioning. If you're frugal, you'll just end up subsidizing owners who aren't. By the same token, in a building with central heating and cooling, your climate choices may be limited.
  

Don't buy into a small condominium complex unless you enjoy intimate relations with your neighbors. In a small condo, you actively participate in the homeowners association because you must. Every vote has an immediate impact on your finances and the quality of your life.


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Next Step: Understanding Co-ops

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