If you’re looking to purchase a home, you may or may not have considered a condo. Condos can be a great choice for some people, but the truth is they’re not for everyone. As part of your home search, it’s a good idea to dive into the pros and cons of condo ownership to see if it’s the right fit for you.
Short for the word “condominium,” a condo is basically a cross between an apartment and a house. Like an apartment, condos are typically adjacent to one another and have shared walls. Depending on the property, you could be living next door to another condo, or you could have neighbors above or below you. While condos can look similar to apartments, there is a big distinction between the two. When you rent an apartment, you’re simply leasing (or borrowing) the unit from its owner. When you buy a condo however, you become the owner of the unit.
Not all condos look like apartments however. There are detached condos out there as well. A detached, or “stand alone” condo can look just like a single-family home. The main difference between a house and condo is that with a condo, you strictly own the unit, and not the land. The land surrounding a condo is typically a “common area” that is shared between all residents of the condo association. Depending on the condo, the common grounds could include recreational areas such as swimming pools, tennis courts, or fitness centers. Upkeep of the common areas is typically paid for collectively by all of the condo owners through monthly dues referred to as Homeowner Association fees (or HOA fees).
Here’s a look at some of the benefits of condo living:
On the flip side, there are some potential drawbacks of condos to consider as well:
Deciding between buying a condo and buying a house really depends on your individual preferences and your current lifestyle. Be taking some time to consider the pros and cons of condo ownership, you’ll have a good chance of determining which style of home is the best fit for you and your family.
Short for the word “condominium,” a condo is basically a cross between an apartment and a house. Like an apartment, condos are typically adjacent to one another and have shared walls. Depending on the property, you could be living next door to another condo, or you could have neighbors above or below you. While condos can look similar to apartments, there is a big distinction between the two. When you rent an apartment, you’re simply leasing (or borrowing) the unit from its owner. When you buy a condo however, you become the owner of the unit.
Not all condos look like apartments however. There are detached condos out there as well. A detached, or “stand alone” condo can look just like a single-family home. The main difference between a house and condo is that with a condo, you strictly own the unit, and not the land. The land surrounding a condo is typically a “common area” that is shared between all residents of the condo association. Depending on the condo, the common grounds could include recreational areas such as swimming pools, tennis courts, or fitness centers. Upkeep of the common areas is typically paid for collectively by all of the condo owners through monthly dues referred to as Homeowner Association fees (or HOA fees).
Here’s a look at some of the benefits of condo living:
- No yard to maintain. Because you don’t own the land outside of your condo, you’re not the one who has to physically maintain it. That means you don’t have to worry about mowing the grass, shoveling snow, or raking the leaves. Rather, the condo association is typically responsible for the maintenance of the grounds.
- Can be more affordable. A condo often costs less than a comparable house, especially since there’s no land associated with the purchase. While there are certainly extravagant condos out there that can carry a hefty price tag, if you’re looking at a condo and single-family house in the same neighborhood, chances are that the condo is going to be the less expensive option.
- Access to amenities. If you’re buying a single family home, the sale price is likely to increase significantly if your “must-haves” include things like an inground pool, tennis court, gym, or hot tub. However, there’s a good chance you could find an affordable condo with all of those luxuries. Some condos even offer things like onsite daycare facilities, community clubhouses, or rooftop terraces.
- Cheaper to insure. Homeowners insurance rates for condos are typically much lower than the rates for single-family homes. This is because your policy will only need to cover your individual unit, and not the outdoor common areas you have access to.
- Added security. Many condo communities are gated, providing restricted entry. Many also have guards who conduct regular security patrols. And high-rise condo buildings often have doormen and concierges, or elevators that require key access.
On the flip side, there are some potential drawbacks of condos to consider as well:
- Fees beyond your mortgage payment. Depending on where you live and what’s offered amenity- and maintenance-wise, your HOA fees could be substantial. According to a study by Trulia.com, the average HOA fee in 2015 was $331 per month. Keep in mind that your HOA fee is in addition to your monthly mortgage payment, and depending on your condo, your HOA fees could increase over time. The same Trulia study found that HOA fees increased 32.4% between 2005 and 2015.
- Not all homeowner associations are equal. Some condo associations are run better than others. If you’re stuck with a poorly managed association, you could see it fall behind on routine repairs and maintenance. And that could cost you and other condo owners a lot more in the long run.
- There are rules to follow. Homeowner associations typically have CC&Rs, or “Covenants, Codes, and Restrictions” that you must abide by while living in the condo community. HOAs can dictate a variety of things, from the color of paint that can be on the outside of the building, to whether you can put up Christmas lights or plant flowers outside your unit. Some HOAs even prohibit tenants from doing things like parking commercial work vans or trucks on the property, putting up signs, or smoking outdoors.
- Lack of privacy. With a condo, you’re likely to have neighbors living in very close proximity to you, and no private yard of your own. If you’re not the type of person who is going to want to see your neighbors every time you take a dip in the pool or enjoy a coffee on the patio, condo living may not be for you.
- Could be difficult to sell. Just as you’re weighing the pros and cons of condo ownership now, potential buyers interested in your condo down the road are likely to do the same. As we mentioned before, condo life is not for everyone. In many cases, buyers with young children or dogs will want their own yard, and they may not consider a condo. This can reduce the pool of potential buyers, making it harder for you to sell when you want to.
Deciding between buying a condo and buying a house really depends on your individual preferences and your current lifestyle. Be taking some time to consider the pros and cons of condo ownership, you’ll have a good chance of determining which style of home is the best fit for you and your family.