For some house hunters, the thought of maintaining a house and a yard conjures up anxiety. Luckily, there are different kinds of properties to choose from that don’t entail a lot of upkeep — and come at a reasonable price to boot. One of those options is a condominium.
Not sure if buying a condo is your jam? Here’s a primer on condo living to help you decide.
What is a condominium?
A condominium, called “condo” for short, is a privately owned individual unit within a building of other units. Condo owners jointly own shared common areas, such as pools, garages, elevators, outside hallways and gyms, to name a few. While condos are typically found in high-rise buildings, you can find detached condos in some markets.
“A homeowners association typically manages the common areas and oversees the covenants, conditions, and restrictions (CC&Rs) that apply to the property,” explains Holly Leonard, a real estate agent and owner of Haven Real Estate Brokers in Atlanta. “Condominiums are often referred to as a ‘common interest development.’”
Why buy a condo?
For many buyers, the answer to this question is simplicity. With most developments, you only have to take care of the interior. All the rest is handled by the professional management company. There’s no lawn to cut or flowerbeds to maintain or driveways to be cleared of snow.
Condos are often cheaper both in terms of purchase price and taxes, but there’s also a community life that single-family homes often don’t provide, including shared spaces and amenities, events and more. It’s a lot easier for to take off and pursue travel or living seasonally in another area with the peace of mind of knowing that once you lock the door, everything will be taken care of.
Factors to consider:
What is the difference between an apartment and a condo?
Structurally, condos and apartments look the same and people often confuse the two. But the difference between a condo and an apartment is ownership. You own a condo and you rent an apartment. In some limited markets, like New York City, you can buy an apartment.
Both kinds of dwellings typically have multiple floors and units on each, with shared amenities and common areas, including (but not limited to) a gym, pool and parking. In some communities, condos can be rented to tenants, too.
Should I rent or own a condo?
Your finances will be the main deciding factor that answers this question. As in any home type, when you buy a home you’ll need a large sum of money for a down payment, as well as closing costs, says John Ameralis, a licensed real estate broker with Compass Real Estate in New York City.
Renting a condo can also be a good opportunity to test out a particular building or area of town before making a long-term ownership commitment. “(Renting allows an) individual to experience living in a condo to see if the ‘condo life’ is something they want to invest in,” Leonard says.
Pros and cons of living in a condo
If you’re thinking of buying a condo, it’s important to weigh the benefits and challenges, so your decision suits your lifestyle and budget. Here are some top things to consider.
- Lower-maintenance living: Since most, if not all, exterior maintenance on condo buildings is handled by the HOA, “condos are best for buyers who don’t want the higher maintenance (responsibility) of owning their own house, such as mowing their lawn, fixing a leaky roof, etc. …” Ameralis says.
- Sense of security: Some condo buildings have security staff, and the entrances are more difficult to access from the outside than single-family homes or townhomes. “Many single people do not like living alone, and condo living makes them feel safer,” Leonard says. Depending on the building, you may have secure entrances and parking, a doorman or concierge, and other amenities that increase security and safety. This can also be a perk if you work odd hours or travel frequently.
- Opportunities to be social: Some condo communities and their respective HOAs organize social events like pool parties, barbecues and doggy playdates. And because you see your neighbors in hallways and in elevators, you’re more likely than not to meet them in person. “Condos are a great place to meet people since you are close to your neighbors, and this can provide a great sense of community,” Leonard says.
- Affordability: Because condos tend to be more compact and require less land than single-family homes, they can be a more affordable way to own property. Property taxes tend to be lower as well. For some first-time buyers, condos make ideal starter homes precisely because they don’t have the upkeep and maintenance of a detached home but you can still reap the benefits of ownership and building equity.
- Amenities: Depending on the condo community, you may have access to top-notch amenities like a grilling area, business center, pool, dog park, covered parking, clubhouse and more, and the cost of enjoying these perks is shared among all residents.
- Investment risk: “Condos can be a riskier investment because you are sharing ownership with other people in the building,” Leonard says. “If one person forecloses or short-sells their condo, it can take a toll on your value since you’re in the same complex.”
- Lack of privacy: Because condominiums share common areas like the lobby, hallways and amenities, a condo might not be for you if you value your privacy, Ameralis says. If you want more seclusion or you entertain frequently, for example, a townhouse might be a better option.
- Limited outdoor space: Condo buildings usually maximize real estate by building up, which often means there is limited outdoor or green space. “If you’re the kind of person who needs to park work vehicles at home or needs a lot of outdoor space for your work or pleasure, a condo may not be for you,” Leonard explains.
- HOA rules: One of the biggest complaints about living in a condo community is that HOA rules can be restrictive, providing guidance on everything from trash pickup and noise to what types of items may be stored on your patio and how many pets you can have. “(Read) the covenants and bylaws before buying a condo to make sure the rules won’t be a problem for you and your lifestyle,” Leonard advises, since breaking HOA rules can lead to fines.
- Rising HOA fees: In general, there are monthly HOA common fees and they go up over time to address building maintenance costs and any added amenities. It’s important to factor in the monthly cost of HOA fees into your home-buying budget, especially in more expensive housing markets. Keep in mind too that condo associations can enact special assessments on all homeowners in the development for unexpected expenses or even new amenities.
- Restrictive rental policies: When you buy into a shared building, you commit to following the rules, which can prohibit how many units can be rented at any given time. “Many condominiums don’t allow owners to rent their units after they purchase, so if you’re buying for an investment property make sure and check the rental regulations,” Leonard says.
Find other housing types:
|Apartment||Apartments are suited for anyone looking to stay in a prime location for a cheaper price near shopping, restaurant and entertainment centers, often at a more affordable cost than buying a condo or single-family home.|
|Condominium||Condos appeal to those looking for a lower-maintenance living, home with a sense of security, opportunities to be social with neighbors, among other factors.|
|Townhouse||Townhouses are a particularly good option or first-time homebuyers or other budget-minded home buyers who want more space than typically afforded in a condo.|
|Modular home||Modular homes are enticing to empty-nesters looking to downsize, couples looking for backyard units, like tiny homes or families looking to upgrade their dated properties in nice but expensive neighborhoods.|
|Single-family home||Single-family homes are best for families who prefer a huge yard and plenty of room to spread out. Others still prefer a low-maintenance condo or townhome that includes benefits like landscaping, snow removal and exterior maintenance.|
|Multi-family home||Multi-family homes are best for those who are interested in getting into real estate investing and are comfortable with the added responsibility and time commitment that comes with being a landlord.|
|Bungalow home||At between 1,000 and 2,000 square feet, bungalows are a great option for young families looking for a starter home or retirees hoping to downsize in a home without stairs, or single homeowners who want the single-family home lifestyle without managing a huge property.|
|Ranch home||Ranch homes are ideal for anyone who prefers single-story living. Singles, couples and families with children can find something to love about a ranch home.|