Don’s Opinion: Condominiums
—Things to know and consider before buying
There are many variables in condominium life. Here are thirteen: per cent of ownership, the neighborhood, the size of the building, the style of the building, the age of the building, monthly assessments, property taxes, your neighbors and their behavior, doorman or not, live in engineer, parking or not, walking score, and property management .
Percent of ownership. All condominiums apportion the monthly assessment and any special assessments by % of ownership. Variables include size of the apartment and floor. For example, a 1 bedroom on the 5th floor would have a lower % than one on the 20th floor. Likewise, a 2 bedroom unit has a lower % than a 3 bedroom.
Neighborhood. Chicago has many fine neighborhoods. Some are better located than others, others are more scenic. Location certainly comes into play here and is reflected in the price. An apartment in Chicago’s Gold Coast will be more expensive than one in Lakeview for the same amount of space.
Building size. A 50 unit building is cozier than a 500 unit building. On the other hand, monthly assessments in the smaller building are higher because there are fewer units to absorb the cost of running the building.
Building style. Condos range in size from a townhome single unit to huge buildings such as Outer Drive East with hundreds of units. Styles could be vintage, historic eg, 1200 Lake Shore by Benjamin Marshall, avante garde like the Aqua by Jeannine Gang, and many non-distinctive buildings.
Building age. In theory, new buildings require less maintenance than older ones, depending on how well they are built. Older buildings, be they vintage or more modern highrises, will require in time new windows, roofs, risers, façade work and the like. Buyers should be aware of these potential expenses which become special assessments unless the building has large reserves.
Monthly assessments. The components of monthly assessments vary. They are meant to include overhead items eg, building insurance, building staff, property management, salvage, landscaping etc. but sometimes include heat, air conditioning, cable, parking and others. Check this variable before buying.
Property taxes. Real estate property taxes are based on valuations by the Assessor’s Office. Properties in Cook County are reassessed every three years. New properties are taxed higher than old and there are times when inconsistencies take place and appeals are necessary.
Neighbors. When you buy a condo you live in close proximity with your neighbors. All condos are subject to the Rules and Regulations of the condominium association and if neighbors are unruly the association can help as compared to single family living where you interact directly.
Door Staff. Most owners love having door staff for the convenience and security. New buildings however, are built with more technology and do not have door staff. This is done to minimize monthly assessment expenses. Most buyers now like to find buildings with lower assessments and find that they are buildings without door staff. Your buying values dictate how you prioritize these factors.
Live in engineer. Much like door staff, having a live in engineer is very popular. If you have a flood in the middle of the night it's a great comfort to be able to call the engineer. Many newer buildings will have the live in engineer and not the door staff. Again, it's a matter of buyer priorities.
Parking. Parking on site is a high ranking priority for many buyers. Parking is either deeded, in which case it is taxed and separately assessed, or rented, or assigned which has several different methodologies.
Walk score. Walk score is a measurement of how near stores, restaurants are. A high score means you are not "car dependent."
Property management. Having a property manager can be on site or off site. Sometimes it's a person and sometimes a company, depending on the size of the building. This is another trade off expense and some buildings, usually small, are self managed. Self management can be counterproductive unless you have committed Board members who are willing to attend to problems and provide accounting and management expertise.