Archive for January, 2010
While co-ops and condos have maintaince fees, houses located in housing developments have homeowners’ association fees. These could be either new homes, or exsisting ones.
The Homeowners’ Association collects the fees, as they are the legal entities created to maintain common areas and enforce deed restrictions. Shortly after you move in, you will receive the Covenants, Conditions & Restrictions (CC&R’s) which should clearly state what needs to be adhered to in order to maintain the quality and value of the properties located within the community.
Restrictions can include parking on street (including your moving truck on moving day), landscaping approval or types of plants allowed, fence restrictions, pool restrictions, erection of basketball hoops or tree houses, storage of boats and RVs, number of pets and age requirements of residents.
If you are looking to buy a home in a community with a HOA, you should request a copy of the CC&R’s; ask about any CC&R’s recorded against the home; find out what the current dues are; find out how often the dues have been raised during the history of the HOA; and determine if there are term limits for the Board, and if Board members have attended training sessions in efficient HOA management.
Related links:
8 Mistakes When Planning a Move
5 Easy Steps When Organizing a Garage Sale
Moving Day: A Checklist of What To Do
Shopping for your first apartment is such and exciting time. In addition to choosing which neighborhood to move to and seeing all that is out on the market, you are invariably confronted with the question: should you go for a condo or a co-op?
The first thing you’ll notice is that condos usually cost more. That’s because buying a condo is more like buying a house. Buyers own their deeds and pay taxes. The good news is the percentage down-payment requirements are smaller and you can sublet condos more readily than co-ops.
Co-op is short for “cooperative housing project,” and you technically don’t own your apartment, as you do with a condominium. Instead, you own shares of the co-op corporation that owns your building. The larger the living unit, the more shares you own in that corporation.
While you’ll pay less money for a co-op you need to keep in mind the board, run by other shareholders, will have a bigger say in almost every facet of living.
As thus, everything that happens in a co-op must be approved. From purchase, when the board checks personal background and finance information, as well as comprehensive employment history and background checks; to any renovation that goes on in the apartment; to subleasing, which in many cases, is not allowed at all. Moreover, co-ops require larger down payments than condos, and those all-encompassing maintenance fees are higher than in condos, although they are tax-deductible.
Finally, selling a co-op can be little harder than selling a condo. Some boards assess a “flip tax” if you resell within a set period, such as one to three years.
So, depending on your financial status, how much money you have for a down payment and how much you want to be part of a group, you can decide for yourself whether you wish to go condo or co-op.
Picture this: A college student—we’ll call him Larry—of meager means rents his first studio apartment. It is the typical young person’s starter home: cheap TV and cheaper sofa, packing box for coffee table, futon cushion for bed. Does this kid need renter’s insurance? Most people think the coverage is in place to protect the holder’s property in case of theft. Since Larry has nothing, why insure it? What is often missed is that the coverage also protects the holder’s assets in case of mishap.
Say the person living downstairs from Larry has lots of very expensive stuff. Now imagine Larry gets drunk, comes home, runs a bath and passes out. Water overflows from the bathtub and drains into the apartment below. Lots of very expensive stuff is ruined. Renter’s insurance covers the costs and saves Larry from a life of indentured servitude.
What if a pipe bursts in the apartment above Larry and not only is Larry’s stuff totaled, but he needs to find some place to crash until the landlord can fix the mess. Having insurance can mean the difference between couch surfing and staying at a nice hotel with a real bed.
What if Larry wants to impress a girl and has some friends over to help him paint the pad before the big date. Then one of his pals falls off the ladder while painting the ceiling and breaks an arm. Renter’s insurance will usually have liability protection, which means that if someone in the apartment slips and falls, the policy holder is covered for any costs, up to the liability limit. And if Larry’s friend sues him, he’s covered for what they win in a court judgment up to your policy’s limit, along with legal expenses.
So, how much does this cost? Just like any other insurance, the premium depends on a number of factors: location, deductible, insurance company and the need for additional coverage. If you shop around, you’ll probably find a policy for $150 and $300 per year, which will get you about $30,000 to $35,000 worth of coverage for your personal possessions and somewhere between $100,000 and $300,000 worth of liability protection.
Come on, admit it, even if you don’t have much, it’s still worth it to cover yourself with some renter’s insurance, ‘cause you never know, right?
Related Articles:
Life Insurance: How Much Do You Need?
Focus on Finding the Right Insurance Agent
These Big Changes in Your Life Will Affect Your Insurance Needs
