They were a married couple – attorneys fresh out of law school who had landed well-paid positions in a prestigious firm. They were novices at buying real estate, so they called Tom Early, a broker in their area. The couple told him they wanted to buy in the city, a short walk away from their work, in a building “with all the amenities.”
Soon they zeroed in on a 1,200-square foot condo unit with three bedrooms and an upscale kitchen with granite countertops and high-end appliances. The building had an indoor swimming pool and gym, underground parking and 24-hour concierge service. Though the condo wasn’t discounted, the couple were willing to pay what it cost for a lifestyle that let them concentrate on work.
“When they have to sell that apartment someday, they probably won’t make a killing. But meanwhile, they’ll enjoy incredibly convenient and comfortable living,” says Early, a former president of the National Association of Exclusive Buyer Agents.
As this true story illustrates, some buyers place a premium on lifestyle over potential appreciation.
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“The issue is that for most city condos, the market is relatively limited compared with the market for family-style houses. Many more people are looking for the classic house with a yard where they can plant flowers and let the dog play,” Early says.
As he notes, there are also other potential drawbacks to ownership of a city condo located within a high-rise building. One factor that’s hard to predict is whether your neighbors will be noisy and intrusive.
Early says that although the choice of city living is typically a lifestyle decision, the buyers of urban condos should keep resale firmly in mind.
Also, he says it’s important to choose a condo building that would let you rent out your unit if necessary.
“Maybe in a few years, you’ll be offered a job in another city and will have to move sooner than expected. In that case you might need to rent out your unit for a period to cover your mortgage payments until you sell,” Early says.
Here are a few pointers for city condo buyers:
1. Lean toward a newer building.
Some who buy in a city market are drawn to the character and elegance of older buildings. But Early warns that high rises more than 10 years old can be prone to costly maintenance issues.
Another plus for newer buildings is that they may have more amenities: fancier gyms, state-of-the-art security systems.
2. Investigate any potential property before committing.
Because of the importance of buying with resale in mind, Nash says city condo buyers should do extensive “due diligence” on any urban building they’re considering.
As a first step, Nash says you need to understand how a condo is situated in a neighborhood.
“Go on a block-by-block property tour. Look at the surroundings of each building and what’s available there, including grocery stores and dry cleaners,” Nash says.
Once you’ve identified the best building in your price range, compare available units, giving extra points to apartments that have been upgraded.
“Which side of the building is the best? Are there any corner units available? Also, track down the best floor plan,” Nash says.
3. Strike up conversations with residents of the building.
Every condo building has its own culture, which is heavily influenced by members of its owner-controlled board, as well as the management company the board hires to run the place day to day.
4. Make sure the complex has ample parking. Maybe you’re like many young buyers who are attracted to a city lifestyle that doesn’t require you to own a car. Even so, you’ll probably want to choose a building that reserves at least one parking spot per unit.