5 Red Flags to Look for When Buying a Condo for Investment

Just as with every other piece of real estate that you are investing in, you should consider location and all of the different aspects of due diligence. Condos are a great way to diversify the types of rentals in your portfolio. However, condominiums come with their own unique set of problems that owners can encounter if they don’t do their homework before buying.

Read on as we explore five red flags to look for when buying a condo for investment in Illinois.

Parking

When you visit the property, take note of the general appearance and the parking lot’s condition. Are signs easily seen and landscaping well groomed? You’re not just buying an individual unit. The accommodations for your enjoyment and comfort should begin the moment you step out of your car, just as they should for any guests you would like to invite, so your search for problems needs to begin with the availability of guest parking when you arrive.

Sound

You don’t want your future tenants complaining about the noise. So pay attention when you are walking through the condo during the showing; when adequately insulated, you shouldn’t be able to hear the sounds of those living on the other side of walls, floors, or ceilings. Check the thickness of doors and walls, and visit during weekends or diner time, so that you get a realistic sense of the noise levels when more residents are at home. The noise level should be minimal; otherwise, you have spotted a major red flag when buying a condo for investment in Illinois.

HOA Financials

You should ask to see the HOA financials because this is an easy way to spot one of the red flags to look for when buying a condo for investment in Illinois. For example, when several residents withhold payment, this may indicate a protest over residents’ problems with the condominium through non-payment. In addition, this lack of funds may create more issues, as the board may have inadequate funds to take proper care of the building.

Association Fee

High association fees that don’t correlate to the amenities offered are another red flag to look for when buying a condo for investment in Illinois. There shouldn’t be any problem in providing you with documents stating the annual dues you will owe, which you will need if you are financing the purchase.

Maintainance and History

investors must review the code compliance history for the building and how the board adheres to routine maintenance and responsiveness when repairs are required carefully. Any deferred regular maintenance can become more costly as time passes. Unseen, minor problems turn into damage and can grow into significant catastrophes. If a history of code violations exists or the board isn’t taking great care of maintaining the structure, these are serious red flags to look for when buying a condo for investment in Illinois.