You need to know how friendly your condo association is to renters. You don't want too many renters as they can change the attractiveness of the units to other buyers, but you also want to know if you are able to rent your own unit to others. Would you need to find and screen those renters or is that taken care of by the property management company? Also be aware that condo bylaws affecting renting can change at any time. If a fair number of owners rent, however, that is considerably less likely to happen. The number of renters may also present a problem when it comes time to obtain a HOA loan for to purchase the property. Mortgage lenders consider is a greater risk if the condo project has a large quantity of renters and may not approve a mortgage loan on a heavily rented project.
Finally, understand exactly who is managing the property. Are the owners managing the building or is it under the control of a management company? Buildings managed by the owners can be fraught with hassles, even if the overall management is done effectively. If you are looking at a building with a property management company, find out all you can about that company and be sure to interview the day-to-day manager directly. You want to be sure your property is in excellent hands at all times.
A final caution is to be fully aware of the home loan guidelines on condos. Many mortgage lenders, during times of tight mortgage credit, restrict their home loans on condos. Mortgage lenders will often require a slighter larger mortgage down payment and may increase the mortgage rate. The reason behind the restrictions is that condo associations will generally not appreciate as fast as single family homes and when they have to be foreclosed on and sold in times of distress, it is more common that the sale price will not be enough to cover the mortgage loan balance. Also, condo associations have historical had a higher mortgage delinquency rate during economic contractions. Therefore, mortgage lenders like to reduce their risk exposure to these types of mortgage loans.
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