I had a buyer in the office today inquiring about the cost of owning a condo.  I thought I’d share my answer with you because there are a few things that you should consider if you are thinking of buying a condo:

Maintenance:  the nice thing about owning a condo or townhome in Destin or along the Emerald Coast is that the Home Owner’s Association takes care of most of the maintenance to the structure of the building.  The rule of thumb is that if a repair is needed to the outside of your condo, common walls and balconies, the Home Owner’s Association will take care of it.  If the repair is needed inside your unit, it is your responsibility.

It certainly takes away from having to worry about a lot of repairs that most home owners are faced with like roof, water intrusion, etc.

You are limited though in what can be done to the outside of your property by the rules of the association.  So, if you’re thinking of doing something creative like changing a door or the type of windows that you have, you will need the review and permission of the association’s board first.

Rules & Regulations/CC&Rs:  mostly all condos and townhomes are governed by CC&Rs (Covenants, Conditions & Regulations) that have been created by the original developer of the complex and possibly modified by the board of directors over the years.  There is also a separate document for Rules & Regulations listing additional items to consider.

It is very important that you read both documents thoroughly prior to purchasing your condo or townhome to ensure that you are comfortable with the association’s pet policy, quiet hours, move in/move out process, etc.

Financial Documents/Meeting Minutes:  please review the balance sheets and budget of the association to ensure that it is in good financial shape.  You want to see a healthy amount of reserves for unanticipated repairs and for needed replacement items down the road.  If there are no reserves or the reserves are limited, you might face a special assessment.  Special assessments can be levied and add to the cost of ownership if the association is unable to pay for needed expenses.

I also recommend that you review a full 12 months worth of meeting minutes.  This will give you a pretty good idea of the issues that have been encountered in the past and what is anticipated for the future.

Insurance:  most associations have structural insurance and in and around Destin most carry earthquake insurance.  Your Realtor will ask for the insurance certificate to see the limits and the type of coverage for a particular condo complex.  I always suggest buying additional insurance coverage for the interior of your condo or townhome.  This policy will cover your furniture, jewelry and liability.  Most insurance carriers will provide them and they are not overly expensive.

COSTS OF OWNING A CONDO/TOWNHOME:On top of the regular expenses like your mortgage, taxes (usually run about 1.2% of selling price in Destin),insurance and utilities, you will have to pay Home Owner Association (HOA)Dues. 

HOA dues are monthly fees that support the maintenance of the outside of the complex, gardening, pool & spa and other amenities, structure insurance, water (yeah!  most condo/townhome owners do NOT need to pay for water), and common area electrical and gas.

So… if you are thinking of buying a condo or townhome, make sure to add the HOA dues, set aside some funds for a possible unexpected special assessment and include funds for an interior insurance policy.

Posted by Tim Shepard - Broker on


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