The great thing about buying a condo is that you can get ultra-cool amenities, such as pools, tennis courts, gym facilities, even upscale perks like restaurants and spas; low maintenance; and great locations for a fraction of the price of a single-family home.
Little wonder many people are shedding the yard work and home repair chores that eat up their weekends for the low-maintenance condo lifestyle. The advantages of condo living — lower costs, less maintenance, and more amenities — make downsizing and up-scaling appealing to many. But making the move also includes some additional adjustments, such as paying a monthly maintenance fee and having to abide by the condo’s house rules.
The seasoned condo shopper knows what to look for and what to ask. But if you’re new to the game, this guide will help to get you started. Having a good real estate agent at your side is a must — two heads are always better than one, and your experienced agent will guide you through the pros and cons of each particular property you consider — likely pointing out things you might otherwise miss.
Amenities — from basic to fabulous
For a growing segment of the real estate market, downsizing from a single-family home to a condo is a great way to have it all. Amenities are often the deal makers, and include everything from pools and tennis courts to the fancier sand-bottomed pool at the Beach Villas in Ko Olina, the biometric fingerprint elevators that open to your own floor at The Pinnacle downtown, boat docks in Hawaii Kai and even accommodations for pets like the private dog park at the Allure Waikiki.
Depending on your lifestyle, you could go splashy or you could go basic, all for a cost — not just in the purchase price, but also in the monthly maintenance fee.
What are the maintenance fees?
As you search for the perfect condo, you’ll notice the wide choice and degree of amenities — but these perks do come with a price. There are monthly fees each owner pays for those features.
When you buy into a condo project, you are buying a single unit and a percentage of the grounds or common areas. The exterior of your unit, along with all the amenities, building conveniences, parking garage, elevators — including upkeep, general repairs and scheduled maintenance, such as painting, roof, pool cleaning, etc. — are paid for by the homeowners association with money collected from the maintenance fees.
Fees can range from a couple hundred dollars a month to more than a couple thousand, depending on the range of amenities, the age of the building and how well managed the homeowners association is. Crunch the numbers. If you are going to save on a gym membership, that is potentially a big savings. Not all maintenance fees are created equally. Ask what utilities are included in the maintenance fee. Sometimes it will include electricity, water, sewer and cable. Those are expenses you would normally have to pay for anyway and are part of the affordability equation.
How old is the building?
Older buildings can have more maintenance issues, so be aware that fees may be higher than with newer construction. Newer buildings don’t have the maintenance issues/repairs that older buildings have. Compare monthly fees with other similar buildings — those that seem either too low or too high could be red flags. With the help of your Realtor, take a look at the association’s budget, especially noting the reserves they have on hand to deal with replacing or repairing aging building components.
Are there any special assessments?
Remember to ask about any current or pending special assessments. When homeowners associations encounter unexpected repairs, they have the option of issuing a special assessment — a charge to each homeowner — in addition to the maintenance fee.
Assessments can last for a couple of months or for several years, so you don’t want to learn about this additional monthly cost after you have closed. Especially in older buildings, big-ticket repairs such as elevators, roofs and lanai railings can deplete condo reserve funds and end up resulting in an assessment to the homeowners if the Association has not planned ahead.
What kind of restrictions and rules should I be aware of? Before buying, read all the homeowners association documents to see what other restrictions may apply and what rules you will need to abide by. There could constraints on renting out your unit, conducting a home business or making renovations, to name a few. As part of any condominium purchase, your agent will get you a copy of the condo’s house rules, by laws, covenants and restrictions. Read them prior to completing a purchase.
Which condos are pet friendly?
If you have a dog or a cat, check to see if the building allows pets. Even pet-friendly buildings may have restrictions on the number, type, size and weight of the pet. Rules about pets occasionally change, so it’s best to read the covenants and restrictions and other condo documents to be sure you can accommodate your four legged friends.
Can I get financing to buy my condo?
If you’re planning to get a loan to make your purchase, you’ll want to check with your lender to make sure the particular condo building meets their lending requirements. Most banks won’t lend if a building is involved in ongoing litigation, for example.
If you are planning on applying for a government loan program, such as a Veterans Administration (VA) or Federal Housing Administration (FHA) loan, verify that the building has been VA or FHA approved before making an offer. Not all condos meet the minimum owner-occupant ratios. Some banks will require a larger down payment for condominium units purchased as rental-income investments. Also, buying a leasehold property may affect the term of your loan, depending on the term of the lease. Check with your lender.
Do all condos come with parking? Kitchens? Washer and dryers?
Condos in Hawaii can be small, and some don’t include a washer and dryer, or parking. Condo hotels may not even have a kitchen — these are sometimes referred to as lodging units. Your Realtor will help make you aware of idiosyncrasies like these. If parking is included, check out the parking stall, especially if you have an oversized truck or a boat. Parking stalls may be small. Additional parking may be available for a fee. Ask your Realtor to help you find out.
What is a condo-hotel?
Condotels are found primarily in Waikiki. A condotel is an individual hotel room that a hotel offers for sale as a condominium unit. These units are normally purchased as rentals. Condotels are typically 200 to 300 square feet, often with no parking and no kitchen.
The Condotel trend began in the early 2000s with the hotel to condo conversion of the Diamond Head Beach Hotel. Others now include the Ohana Ala Wai Towers, Aston Waikiki Beachside, Aston Waikiki Parkside, Bamboo Hotel, Kuhio Village and The Ala Moana Hotel., Condotel prices are generally lower because of their small size, and are good for motivating first-time investors.
Find out what restrictions, if any, there are in renting out your condo hotel unit. Some condo hotel owners opt to rent their units in a hotel pool, and others would prefer the security of a long-term tenant or may wish to manage the property themselves.
Some banks won’t lend for condo hotels, or will require a larger down payment for this type of unit. Check with your lender to see if they lend on condotel units.
Whether you are looking for an inexpensive starter home or for a luxury penthouse suite, the Oahu condo market offers a broad range of prices and lavishness. The market offers dorm-sized condo hotels for students looking to live it up on a budget as well as high-rolling luxury for those who own real estate around the world. Regardless of your price range, the perfect condo awaits you.