Should I pay off the special assessment if I am planning to sell my rental condo soon

[Carol Hu]

I have a studio condo that I am planning to sell in the next few years. The building just went through a 1MM remodel and my unit has a special assessment of $7700. I have the option of paying it off in one shot or doing a 120-month payment plan. The interest rate on the payment plan is $5.95% and they also charge a $12/month accounting fee, which brings the monthly payment to $97. The current monthly HOA is $277.

I have enough cash sitting in the bank and earning 5-5.5% interest. I would just pay it off in one shot if I am planning to hold this condo for longer term. The condo worths about 270K, I was wondering which way would make the condo more marketable, an additional $7K on the price or an extra $97 on the monthly HOA?

[Michael Haas]

@Carol Hu Given that you have cash in the bank earning a lower rate of return than the interest rate on the special assessment and the relatively small $7,700 amount I would pay this off in full. Special Assessments generally spook buyers so removing this potential objection is always a higher priority than trying to optimize for purchase price / payment. In our market condo's with unpaid special assessments tend to languish on market unless priced very attractively. Hope this helps and reach out to me anytime if you have other questions! If you'd like a more exact answer on pricing I'm happy to take a closer look, just DM me the address. Cheers!