People who want to become homeowners in the future might be inclined towards condos as compared to single-family detached houses for many reasons: condos require less money for their upkeep, they look more modern, and people see them as a more affordable option.
Definition of a Condominium ( more commonly referred to as a condo)
A condo is a private housing unit, and it’s situated within a multi-unit community, building, or project. While the houses are typically just like an apartment (as they share walls), these units can be constructed similar to a townhouse, or a semidetached home, or they can even be fully detached homes. Condos regularly have shared common areas, amenities, and facilities, both internal (garages, laundry rooms) and external (swimming pools, yards).
Usually, there are 2 main kinds of condos: ones that were built initially as condominiums and those that were simply converted from rental apartments. Converted condos may need more upkeep and repairs in the future.
A condominium association is an important factor in condo life; a selected board of directors runs it. The board is responsible for maintaining all the services, common areas, and other facilities; it’s similar to a community HOA (homeowner’s association). However, condo association fees are much more expensive because these commonalities in condo ownership are very significant. The association collects dues from condo owners on a regular monthly or quarterly basis.
Comparing Housing and Condo Prices
To make a price-wise reasonable comparison, you should also consider the monthly condo association dues, and then associate that amount to an increased monthly payment.
So what does this mean for you? It means that if you don’t have to pay condo association fees, you may possibly increase your buying power by approximately $60,000.
However, much will depend on the facilities that a condo association offers. For instance, if your fee covers essential services like trash collection and water, it already includes costs that you would have to pay if you purchase a house.
Advantages of Purchasing Condos
Numerous lifestyle-related benefits come along with the ownership of a condo.
- Security. Condo buildings are frequently staffed with guards or are gated. They also have modern security systems.
- Gatekeeping services. Most condo complexes have their own front desk staff, doormen, alongside with custodial staff.
- Luxurious features, grounds, and facilities. Clubhouses, spas, tennis courts, BBQ areas, rec rooms, and jogging trails are among some of the amenities that a condo can offer to its residents.
- Less upkeep and maintenance. No replacing broking windows, raking leaves, or mowing lawns. You are usually responsible for only the interior of your unit.
- Modern features. If you love stainless appliances, an open floor plan, and granite counters, a newly built condo typically has them.
Disadvantages of Purchasing Condos
The drawbacks of having a condo are those typically characteristic of communal living or apartment life.
- You usually are too close to other fellow unitholders. Smells and sounds can pass through adjacent walls.
- Your condo fees usually rise. If you’re buying a condo in an older complex, it might need more reserve funds to pay for the cost of exterior maintenance, roofing, and plumbing, which can mean higher association fees and sometimes even special assessments.
- A condo is not a house no matter what the design. Many condos are single-story flats. That means even a two-bedroom house is bigger in overall square footage compared to a two-bedroom condo. It may feel more compact as you won’t have the windows, stairways, hallways, and other attributes that provide you with a sense of grandiose to a dwelling. Furthermore, with a condo, you won’t typically have a private driveway in which you can wash your car or a private garden to tend.
- You feel like you are living in a “Big Brother”-like situation while living within a condo community and following rules you never created. For instance, you could be restricted about where you can smoke or to the number and types of pets you can have.
Selling the Condominium
It would help you to consider the marketability and look into the future of your unit if you want to sell. One of the key disadvantages of buying a condo is that your apartment in comparison with an identical unit will never be worth more. Your investment depends on neighboring sales. Your market value will be affected if another unit owner chooses to sell at a low price.
You might not qualify for an FHA loan if you decide to buy in a condo complex, typically, because the tenancy percentage of unit owners vs. renters surpasses 50%. Consequently, a buyer would be required to pay in cash or to get a conventional mortgage loan. This restriction can reduce the number of buyers when you are planning to sell.
If you’re confused about buying a condo or a house contact Lendova Mortgage toll-free at (888)-387-4808 and one of our property experts will guide you according to your preferences.