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What to Look for in Buying a PUD?

Where land is expensive and scarce, PUDs are a way to provide homes for less than it would cost to build on standard lot sizes. For example, lot sizes may average a quarter of an acre in the area, but the developer gets the city to approve a PUD with ten homes to an acre, which makes homes a lot more affordable, though somewhat cramped.

So, in buying a property in a PUD, be wary of developments that have too many look-alike homes jammed together on small lots. This gives the homes a sterile, cookie-cutter look and is not the type of community that creates homeowner pride. Keep in mind that homeowner pride is a key component in maintaining and increasing your property values.

Because many PUDs have market economics that are similar to condos, read the earlier section on condos and townhouses. The monthly HOA fees are often less than for condos and townhouses, however, because you are responsible for your entire dwelling rather than just the inside.

Although you have more control over your surroundings, you still need a strong HOA to keep the area looking attractive and inviting to homebuyers, so owner-to-rental ratios are still important here. Having lots of rentals in the development will depress the neighborhood’s value—in a standard subdivision, that means more than 20 percent rentals.

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