Condos offer easier upkeep and affordability compared with single-family homes, and for buyers who do their homework, they also can be a good resale investment, experts said. “As with any real estate investment, location is primary,” said Cindy Moses, a broker with Keller Williams Metro Team Realty in Rockville. “That is even more the case with condos.”
Buyers should purchase a condo close to the District and the Metro, she said; convenience is a big selling point when it comes to resale.
That goes for parking too. “Garage parking or reserved surface parking are a big plus and often only available as an additional cost,” Moses said.
And even if the parking space does not come with the condo purchase, or only can be rented, it still is a selling point — so long as it can be offered when the condo is sold.
But the cost is worth it. Yale Scott, a realtor with TTR Sotheby’s International Realty in Washington, said a parking spot can add anywhere from $20,000 to $40,000 to the resale value.
Potential buyers also need to study who their neighbors will be, looking at a condominium’s owner-to-investor ratio and focusing on the percentage of owners who actually occupy their units.
“If the percentage of ‘rented’ exceeds 15 percent, beware,” Moses said.
Even if buyers can get financing now, if the number of renters exceeds a certain limit, future buyers could have trouble getting a loan or, at the least, be forced to make higher down payments. That decreases resale opportunities because most condo purchasers are first-time homebuyers.
Would-be investment buyers also should review a condominium’s financials; looking at them from the perspective of would-be lenders. For example, banks do not want to lend for condo purchases where there are a lot of owners in arrears on payment of condo fees.
“Make sure to see if the reserves of the condo association are adequate and if the building is sticking to its budget,” said Aras Butas with Keller Williams Realty in Arlington.
It also pays to consider a condo’s sale price history. Moses said buyers should not be deterred by prices that have gone down as a result of the recession and should research as far back as August 2007.
“Did prices fluctuate drastically or have they been in keeping with the overall market?” she said. Also consider how long a unit stays on the market to gauge demand.
In terms of condo features, Paul Gleger with Georgetown-based Hotpads.com, said smaller condo units tend to have a larger resale market, even if they have a lower return.
He advises buyers against purchasing a condo with more than two bedrooms because there are not many families in the condo market.
David Branch with Long & Foster in Washington said buying a unit with a washer and dryer is important for resale because very few people want to walk down the hall or go to the basement to do their laundry.
“Finishes are important, too,” he said, “like granite countertops, good wood cabinets, stainless steel appliances.”
After assessing the interior, buyers should take a look out the windows, Branch said, because the view also affects resale. Many people like balconies and they add value. He also said he encourages people to buy in a pet-friendly building since so many buyers have cats and dogs.
And, as with any sale, homebuyers should consider what a condo could be with a little effort.
“Is there potential to put some work in, even if it’s minimal, to increase property value?” A fresh paint job and new light fixtures can make a dramatic difference, Scott said.
