By: Jim Digre
The economic conditions brought about by the housing collapse in the United States has had a devastating affect on the condominium market for Oak Park, River Forest, Forest Park and Berwyn. To be frank about it you could say that the ability to sell your condo, especially if you have a one bedroom, is virtually non-existent. Conventional Wisdom says the market will come back and all you have to do is hold on. The problem with that is it doesn't take in to consideration life changes that require people to move on to different housing arrangements. Knowing this, many owners are very worried about the value of their unit and what to do if they should have to move for one reason or another.
There are a number of steps that condo owners and association boards can take to help mitigate this situation. First and foremost is to do what it takes to get your building FHA approved. To be blunt, there is absolutely no excuse or rationalization for not doing so. The predominant buyer for condos, especially one bedroom units, is the first time buyer. Low-down and no-down conventional mortgages that these buyers need are currently extremely rare if not completely unavailable. So, if you expect to have any market for your units and want to avoid foreclosed or abandoned units, get this done. Nothing will reduce the over-all value and marketability of your units more than a large number of foreclosures in the building.
Secondly, the Board needs to review whatever restrictions exist on allowing owners to rent out their units. The number of rentals in a condo building can adversely affect the ability of borrowers to get a mortgage for a unit in the building, but this is no excuse for not establishing a workable rental policy. Having a rational and fair rental policy enables those owners that must move and can't sell to be able to continue meeting their mortgage obligation, and most importantly for the association, to pay their assessments.
Thirdly, the matter of pets in the building or complex should be considered. According to Wikipedia, 63% of households in the United States own one or more pets. When it comes to selling a condo in your building, if you have a no-pet policy, 6 out of 10 potential buyers are eliminated from what is right now not a huge pool of buyers in the first place. Eliminating a no-pets rule can go a long ways towards maintaining the values in your building.
In addition to the above three recommendations, the Board needs to pay close attention to building maintenance. Making a good first impression on a potential buyer and retaining property value falls heavily on curb appeal and over-all cleanliness of the building. Keeping the grass cut and edged (unfortunately an area often overlooked) along with weeding and edging the shrub and flower beds can do wonders for the appeal of your building. You don't necessarily need tons of flowers to make your landscaping appealing, although it does help, you just need to keep things neat and clean. Blowing papers, empty bottles and miscellaneous trash on the property are a statement to observers that the people who live in the building don't care about it and is a huge turn-off to a potential buyer. The Board needs not only to insure that the maintenance personnel are doing the job they're being paid for but also to constantly remind residents that it is every one's responsibility to keep the place clean. If you see some trash, pick it up. Everyone will benefit and you will not only enhance the value of your property but will enjoy living there more.
Finally, and this is an area that can create hostility and resentment, the subject of assessments must be addressed. It seems that the first thing that many condo owners do when money gets tight is to stop paying their assessments. Somehow they manage to make the monthly mortgage payment (so they don't get foreclosed on) but figure they can skip the assessment. Condo Boards and management companies that take a laze-fair approach to collection of past due assessments are not only cheating the paying residents but also condemning the building to a gradual decline in value. Without the assessments, the Board will be unable to pay the expenses of maintaining the building. The Board, working in conjuction with the management company must pay attention to the status of un-paid assessments and take the necessary actions to collect what is due. Using legal action should be the last resort. Someone on the board, along with a management company representative, if needed, should first meet with the offending resident(s), and find out why the assessments aren't being paid. They should then try to work out a solution that is fair and equitable to both the resident and the association. Remember, the further an owner gets behind, the more difficult it will be for them to catch up. Action needs to be taken right away and followed up on or more and more residents will stop paying. What may end up happening is, "if he's not paying, why should I?" will start to spread through the building and that can only spell disaster for all concerned.
If you want more information on how to initiate the above suggestions, contact your management company. If they can't help, give us a call here at Dowling Properties. We would be happy to sit down with you and explain how working together we can keep your property at its highest value.
Contact us at: 708-771-0880 or visit our web site at http://www.dowlingproperties.com/
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