Condo Living 101

When you convert an owner- occupied condo into a rental property, your real estate taxes may rise. Although rules vary by jurisdiction, here are two common reasons taxes increase:

First, some jurisdictions provide a “Homestead Exemption” for owner-occupied residential real estate. This benefit exempts a
portion of the property’s value from taxation. If you convert your condo to a rental, you normally lose this exemption.

Second, owner-occupied residential real estate is usually taxed at a lower rate than non-owner occupied residential real estate. That is because the non-owner occupied property is assumed to be held for investment purposes. Accordingly, it is taxed at a higher rate.

How will the tax assessor know when you converted your condo to rental status? You are going to furnish that information on your next federal and state tax return. You report your real estate rental income and expenses on Schedule E of Form 1040.

Take the time to check out the complex before you buy and look out for these red flags:

-If more than half or so of the units are rentals, think twice about the project. Upkeep may be poor and some lenders will not make a loan on a unit in the complex, which could reduce the long-term value of your investment.

-If the condo association doesn’t have a healthy reserve fund, beware. If there isn’t money to fix major items such as a new roof or plumbing, the members will be hit with a special assessment to pay the tab.

-Avoid a condo association in which the board of directors isn’t getting along. They will make poor decisions for everyone else in spite of one another.

-Steer clear of a condo project that is heavily involved in litigation. Lawsuits with builders and other homeowners can put a cloud over the project

Source: Mid South Condos

Condo living is a great convenience especially for people on the go. It is usually situated at the heart of a business district, that’s why it is very accessible to work place, shopping centers, schools, and even churches. You don’t need someone to guard your place since the building has it’s own security.
There are however some tradeoff’s to living in a condominium, like the fact that you’d have to live in close proximity to neighbors a wall away. and so much more. Not having the liberty to enjoy your own lawn, and even the frequent barbecues you used to have without having to go down to the poolside or recreation area where it is limited to.

Nationally condos have become almost as popular as single family homes for vacation properties. Many families consider their second home as a means of diversifying their portfolio. While the trend is picking up in Wisconsin, the appeal has always been toward cottages and cabins.

Buyers believe that owning homes in two entirely different markets increases the chance that their total equity will continue growing. They also have the advantage of more liquidity. If needed, they could sell one of the homes and live in the other.

Brokers in Wisconsin report the trends are picking up in the area. Buyers in this area are buying cottages and cabins for second homes. Approximately 42% fall in this category while approximately twenty percent buy condos.

The difference in the buying habits today is that buyers are looking for the appreciation in value of the property rather than looking to rent the property. Buyers are also not looking to repair or maintain their vacation property. The trend is leaning toward one of convenience. For these reasons, buyers are vying toward new construction.

Buyers don’t want to work. They are buying these properties to visit them and relax in a different environment. Currently Baby boomers are driving this trend. Since they have more disposable income than prior generations had, this trend could continue for some time.

Source: 7263.org

There are several documents involved in condominium ownership that you may want to review before purchase. These papers should be available from the condo’s board of directors or their representative. They include: Master deed, Bylaws, House rules, Covenants, conditions and restrictions: Private restrictions on the use of project property; usually created by the developer

If you really want minimum maintenance in your condo unit, you better consider taking away some of your frilly designed furniture and accessories. First, you can minimize your knick knacks without sacrificing design (maybe remove some that don’t add to the interior of your room). With this, you have fewer things to dust off. You can also remove your curtains and replace it with rolling blinds. Rolling blinds are a lot easier to handle. You can just wipe them off with a wet sponge (it’ll take only a few minutes) and continue doing other things afterwards. Removing the curtains can also minimize your laundry load.

Photo taken from http://images.craigslist.org

If you want to achieve a simple look in your condo design, then maybe you can do with a Japanese interior. Japanese interior calls for earthly colors such as beige and brown. They seldom (or never at all) use colors that attract attention (like candy apple red, apple green, powder blue or any pastel color for that fact) compared to other designs. They would like to retain simplicity in their interior and as you design your home, make sure you have symmetry when it comes to your things (buy two display earthen pots instead of two). Never ever forget their famous short table for your dining room! I’m sure your friends will love the new look!

Photo taken from http://pro.corbis.com

If you are planning to buy a condo and relocate there for good, might as well look for a unit that has a high roof. If you have been living in a house all your life and decided to get a condo instead because of maintenance or financial issues, then you must keep in mind that condos are generally smaller than your current house. What you can do so that you won’t feel anxious about your new home is to look for a unit that has high ceilings. There are a lot of units out there for sale that has this feature. High ceilings normally emanate a much larger space (it’s just a matter of tricking what the eyes perceive!). A much higher ceiling too can provide more space for storage. You can put up a high rise cabinet for you to put your knick knacks inside.

Photo taken from http://owengeronimo.vflyer.com

As we all know, dark colors tend to make the room look smaller. If you have light colored wallpapers or white paint on your walls, then congratulations, you just made your condo look bigger. However, when look at your unit, there seems to be something wrong. Oh, those kitchen counters! If you have counters with black granite tops, better call your contractor now and have those removed. Even if you have a large kitchen, the black tops tend to make your kitchen look smaller than its real size. Try to go for a lighter shade of granite if you really want granite for your countertops. Also, you can have Maple wood finishing for your countertops. This light colored wood can surely make your kitchen look bigger.

Photo taken from http://www.mapleblock.com

Across the US and the world, developers are halting development projects due to rising costs and other factors that have to do with the worsening global economy. Existing condos are getting quite overcrowded as people move out of single unit homes opting to get near their workplace to save on transportation costs and other expenditures for which they have less cash to spend on. Maintenance of existing condos are also being streamlined and tenants are left to suffer and deal with the consequences. Abandoned units and other issues are beginning to show, straining funds and people who all but pray for an end to this recession, soon. With unemployment soaring, people are leaving their homes into rentals that saves some cash, enough to get by and survive, till we all see the end to this recession, hopefully sooner that predicted.