Borrowers will sometimes ask what are the advantages and disadvantages of purchasing a home in either a Condominium or Planned Unit Development (PUD) project. Before someone can decide whether this type of property is for them or not, it is important to know what they are.
Most homebuyers purchase a home that is not inside either a Condo or PUD project. This is due primarily to the fact that the vast majority of single family homes do not exist inside these projects. However, there are certain advantages for each over the traditional home outside of a project.
The first advantage is amenities. Most Condo and PUD projects will have amenities available to homes in the project that are available for the homeowner’s use. The type of amenities available will vary by project. Examples include items such as swimming pools, club houses, tennis courts, workout facilities and more. Many homebuyers like to have access to these amenities without having to go to the expense of either adding them directly to their property or by joining clubs that offer those items.
One other advantage to Condo or PUD ownership is there may also be certain amounts of maintenance that are included as part of ownership. This is especially true for Condo and attached PUD project. Free standing units in PUD project will generally not offer this.
However, just as there are advantages for Condo and PUD ownership, there are certain disadvantages as well. The primary disadvantage is the expense of a mandatory membership in the Homeowners Association (HOA). The HOA dues, depending on the amount of amenities offered, can add to the cost of home ownership. Further, in the case of a Condo project, lenders will take into consideration the management of the project to verify it is well managed and financially stable. This increases risk to the homebuyer that, if they are not well-managed, it may cause marketability issues in the future for the homeowner.
Condo and PUD projects have unique characteristics beyond those listed in this document. Based on the needs of the homebuyer, they may or may not be a great choice for a home purchaser. When buying a home, it is always a good idea to contact a qualified professional for assistance. The Loan Officers at Googain have a wealth of knowledge and can assist the homebuyer in deciding whether Condo or PUD ownership is a good choice. Contact us today for more information.