$325K Watson St. - near Crestview StationWondering about the large number of 2 unit detached condo projects in Central Austin. These are new construction properties that look like single family homes, but that are technically classified and sold as condominiums. This is happening quite a bit in Central Austin where land is becoming increasingly scarce and builders buy one full size lot, tear down the existing structure and put two, even bigger properties on the lot. The builder may subdivide the lot and classify the dwellings as single family homes, however, sometimes the lot size is too small to qualify the dwelling as a single family home. In addition, even if the lot is big enough to qualify as a single family home, the builder has to go through a public hearing to subdivide the property and may be met with adversity from neighbors and neighborhood associations in some of these older Austin neighborhoods. In this case, the builder may prefer to create a condo project, which is just a administrative legal process.
These properties can be wonderful: exquisitely designed, well constructed, close to downtown, well priced, etc. Overall, precisely what you are looking for in a new home. However, before you buy, there are a couple of things to know about these properties before you consider buying one.
1. Mandatory COA: Even though there are just 2 units, there will have to be a COA, which is a legal entity. The COA should have a budget that pays for common grounds liability insurance and tax preparation, at minimum. Be sure that the money you are paying to the COA goes to something of value. As one of the owners, you will be an officer in the COA and have 50% voting rights. If you and your neighbor do not agree on something 100%, then nothing happens. Either everyone agrees or disagrees.
2. Perceived Market Value: Most home buyers are searching for "houses" to buy and therefore, there is a lower perceived value in a condo vs. a single family home. This may be a problem when you go to resell your property. It will actually be listed as a "condo" in the MLS and may not even pop up in potential home buyers' searches.
3. Condo Financing: The underwriting requirements for financing a condominium is changing and financing is getting tougher to obtain as time goes on. Some federally backed loan programs will not finance a condo project that is not at least 50% owner occupied. If your neighboring condo is owned by an investor, it may be difficult for you to find a buyer who can buy your condo with conventional financing when you go to resell.
Some additional condo projects in Central Austin:
These properties can be wonderful: exquisitely designed, well constructed, close to downtown, well priced, etc. Overall, precisely what you are looking for in a new home. However, before you buy, there are a couple of things to know about these properties before you consider buying one.
1. Mandatory COA: Even though there are just 2 units, there will have to be a COA, which is a legal entity. The COA should have a budget that pays for common grounds liability insurance and tax preparation, at minimum. Be sure that the money you are paying to the COA goes to something of value. As one of the owners, you will be an officer in the COA and have 50% voting rights. If you and your neighbor do not agree on something 100%, then nothing happens. Either everyone agrees or disagrees.
2. Perceived Market Value: Most home buyers are searching for "houses" to buy and therefore, there is a lower perceived value in a condo vs. a single family home. This may be a problem when you go to resell your property. It will actually be listed as a "condo" in the MLS and may not even pop up in potential home buyers' searches.
3. Condo Financing: The underwriting requirements for financing a condominium is changing and financing is getting tougher to obtain as time goes on. Some federally backed loan programs will not finance a condo project that is not at least 50% owner occupied. If your neighboring condo is owned by an investor, it may be difficult for you to find a buyer who can buy your condo with conventional financing when you go to resell.
Some additional condo projects in Central Austin:
$399K Alegria St. - Crestview Area
$325K 2nd St - East Austin
$275K Stacy Ln - 78704
