Pros and Cons of Buying a Condo That You Need To Know Before Signing a Contract
What You Will Read In This Article
Perhaps you are considering living in a condo. You want the freedom and independence that comes with owning your own space, but you’re not sure if it’s worth all of the extra work and expense.
Of course, there are advantages and disadvantages to buying a condo, just like there are for purchasing any type of real estate. By weighing the pros and cons, you can make a more informed decision on what’s best for you.
What Exactly Is a Condo?
A condo is a type of housing where you own your unit but share certain common areas with your neighbors. These areas can include things like land, hallways, lobbies, and fitness rooms. Condominiums are often compared to apartments, but there are some key differences.
For one, you own a condo and rent an apartment also condos are typically newer and have more luxurious finishes than most apartments. Additionally, while rent for an apartment usually covers water, trash, and heat, you will usually be responsible for these costs yourself in a condo.
Some additional characteristics of condos include the following.
- You have exclusive use of your unit and the areas immediately surrounding it
- You are responsible for maintaining your unit, inside and out
- There is a homeowners association (HOA) that manages the shared areas and enforces rules and regulations
Read More: First Time Home Buyers Guide
What Type of People Buys Condos?
Condos are popular with a wide variety of people for various reasons. Some people like the idea of living in a more secure community where they are able to lock their doors and leave without worrying about their homes or belongings. Others appreciate the social aspect of living in a community where they can get to know their neighbors and feel a sense of belonging. And finally, many people choose condos because of their lower cost than single-family homes.
Additionally, condos often come with amenities that are not standard in apartments, such as an extra storage area or a doorman. If you enjoy joining clubs and socializing with your neighbors, purchasing a condo can offer many opportunities to get involved.
Parents with young children will also often buy condos because of the many family-friendly amenities usually included, such as a playground or pool. And lastly, retirees and people who travel or work a lot frequently choose condos because of the low-maintenance lifestyle.
Pros of Buying a Condo
Buying a condo has several advantages that make it an attractive option for many people. Here are nine reasons to consider a condo over a single-family home.
For many people, condos offer a great value and an affordable way to buy property in the city. Because you only own your unit in a condo, your monthly HOA fee will generally be lower than that of a homeowner with a lot of land.
In addition, condos generally appreciate at a rate similar to single-family homes.
Condos can be a great option for people looking for a secure place to live. Unlike single-family homes, condos typically have security systems and restricted access to the building. This can give you peace of mind when you’re away from home. Some of these security features include:
- Secure entrances
- Video surveillance
- Gated communities
- Doormen/security staff
Additionally, because you are living in a common community, there will always be neighbors around that act as a form of security or neighborhood watch that you might not get with a single-family home.
As mentioned earlier, one of the key differences between condos and apartments is that you are responsible for managing your unit in a condo. It includes things like painting, repairs, and keeping the property clean.
While this can be a lot of work, it also gives you a lot of control over your living environment. You can choose what upgrades or changes you want to make and maintain the property as you see fit. Also, with an HOA management taking care of the exterior of the buildings, you won’t have to buy things like snow removal or lawn care equipment.
HOA management is beneficial for families or retirees that don’t want the hassle of doing extra maintenance on their property but still enjoy owning their own unit.
Lower Insurance Costs
Condos are often considered a lower-risk investment, which means that your insurance costs for things like fire and theft may be lower than for a single-family home. While insurance costs vary significantly by location, age of the property, and claims history, owning a condo can reduce your premiums.
When buying a condo, you can often get a discount on your rates. Some other discounts to be aware of that can lower your insurance costs when buying a condo include:
- Multi-policy discounts
- Senior citizen discounts
- Discounts for good grades when you have children living at home
One of the most significant benefits of buying a condo is building equity in an asset. Unlike renting, when you buy a condo, you are slowly gaining ownership of the property and, as it increases in value, your equity stake grows as well. Additionally, if you need to sell, condos typically have a good resale value.
Because buyers feel more confident in purchasing a condo, knowing that they will have easier access to financing and that the property is less likely to need repairs. In addition, many cities offer first-time homebuyer programs for condos, which include grants that can help you afford to buy.
Because you manage and maintain your unit, there is no need to worry about when maintenance needs to be done in the exterior and common areas. Those are handled by the homeowners association and the pooled funds from all the owners of units in the condominium.
In addition, if you plan on doing any upgrades or remodeling projects down the line (and you own in a well-maintained complex), the HOA is also likely to have rules and regulations in place that will help you or your neighbors maintain a standard level.
In addition, a condo will usually have contractors they work with for repairs, meaning you might not have to go through the hassle of finding a contractor. This can be a real lifesaver when something breaks or needs to be fixed right away.
Easy to Leave Home for Traveling
Even if you’re away for just a little while, having an HOA in place can take some of the stress out of leaving your home when traveling or on vacation. Some condos have 24/7 security and staff onsite to monitor common areas, making it safe to leave your property even when you are away for an extended period.
In addition, many HOAs have rules about rentals, so you can be sure that your home will be taken care of while you’re gone. Also, because management usually takes care of the outside shared areas, you won’t have to worry about not mowing your lawn or not shoveling your driveway while you’re away.
Accessible Luxury Living Amenities
Having an HOA also means access to some great amenities. Many condos have outdoor pools, hot tubs, courtyards, and fitness centers. Other shared amenities include:
- Dog parks
- Bike racks
- Car washes
- Community gardens
- Tennis courts
These can be great places to relax during the summer months or work out when you don’t feel like hitting the gym on your own. These amenities also provide an excellent opportunity for community building and socializing.
Part of a Community
Living in a condo complex can be a lot of fun, as you have the opportunity to get to know your neighbors. In addition, many complexes have regular social events, from BBQs to holiday parties, that help residents get to know each other better. These events can be a great way to make friends and feel connected to your community.
In addition, these events can also be a great way to meet people with similar interests. Also, by having these amenities available as part of the community, you won’t have to fill your condo with similar things like exercise equipment.
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Cons of Buying a Condo
While there are many advantages to purchasing a condo, there are also some potential downsides that you should be aware of before signing any contracts.
Before buying a unit, be sure to look into the condo’s HOA regulations. You don’t want to be surprised later with rules that might infringe on your rights, so it’s essential to understand what you’re getting into from the start. In most cases, rules will be laid out in a formal document known as the CC&Rs or Covenants, Conditions, and Restrictions.
Make sure to review these very carefully before buying to ensure you’re okay with the HOA’s rules. Unfortunately, many people have purchased condos only to realize too late that they don’t like the HOA regulations.
HOA fees can be another downside to owning a condo. In addition to your mortgage payment, you will likely have to pay monthly HOA fees as well. These fees go towards the costs of maintaining common areas and amenities and providing security for the complex.
Be sure to ask how much the HOA fees are before buying and how often they are due to ensure you can afford them. HOA fees can vary from building to building, so it’s a good idea to see what the average rate is in your area. In addition, some HOAs charge additional fees for things like parking and cable.
Potential for HOA Mismanagement
While most HOAs are run efficiently, there is always the potential for HOA mismanagement. This can lead to too restrictive rules, repairs not being done on time, and increases in HOA fees.
If you decide to buy a condo, it’s essential to be an active member of the HOA and voice your opinion. This way, you can help to ensure that your interests and rights are protected. The last thing you want is to be dealing with a mismanaged HOA when you’re already struggling to make your mortgage payment.
Being an active member of the HOA doesn’t take too much time or effort and can be a great way to get involved in your community. It also means that you will know what’s happening at your complex and be alerted to any potential problems early on.
Lack of Privacy
Unless you plan on living by yourself, privacy might not be the best thing about condos. Most condos share walls and common areas with several other units, so there’s always a chance that someone might hear everything that goes on in your home.
In addition, condo buildings are usually close together, so you might not have as much of a view as you would if you were living in a detached home. Finally, parking spots can be tight together, which can be a pain if you have a large SUV.
If privacy is a concern for you, it’s essential to ask about the layout of the condo complex before buying. Some complexes have more units per building than others, and some have more common areas. It would be best to consider how many people will be living in the condo with you.
For example, if it’s just you and your spouse, a smaller community might be better for your needs than an enormous complex that has dozens of units per building.
Many people love their pets and enjoy having them around. However, this isn’t always possible with condos and HOAs. Many HOA boards place restrictions on the number and type of pets you can own, as well as strict rules for pet waste removal.
So, if you have pets or like to plan, it might not be a good idea to buy a condo because of the potential for pet restrictions. You can get exceptions to the rules in some condos, but this is not always the case.
If you have a car, parking can be another potential issue with condos. Most complexes have a limited number of spots, and they are often assigned on a first-come, first-served basis. It can be a problem if you work late or like to entertain guests.
Another related issue is if you have more than one car. In most cases, you will only be allowed to park one car in the complex. If you have a second car, you will need to find parking on the street or find a new place to live.
If you plan on moving soon after you buy, you might want to reconsider purchasing a condo. One of the main problems with condos is some people think they lose value over time. However, this isn’t necessarily the case, most condos maintain their value and appreciate at a similar rate compared to single-family homes.
Of course, this will depend on the location and condition of your condo; however, you should consider this when deciding how to finance your purchase.
Some Have a Lack of Storage Space
Another potential issue with condos is a lack of storage space. This can be a problem if you have a lot of belongings or like to entertain guests. In most cases, the only storage space you will have is in your unit, and it will be limited. If this concerns you, make sure to ask about the availability of storage space before you buy. Sometimes, your condo might have extra storage in the basement or a separate storage area.
Top Tips for Buying a Condo That Works For You
You’ll never know what life will be like in a new place until you move there. However, that doesn’t mean that you can’t prepare yourself as much as possible to make the right decision for your needs and lifestyle. So, before you buy a condo, keep these tips in mind.
Read and Understand the HOA Documents
Before you buy a condo, it’s essential to read and understand the rules in the HOA documents. These rules can include restrictions on pet ownership, parking, outdoor furniture, storage space, and more.
Make sure that you are okay with these rules before signing on the dotted line. You can usually get a copy of the HOA documents from the seller or the management company. Be sure to read the documents all the way through and ask as many questions as possible before buying. It’s much better to read and understand the documents before you buy rather than after when you run into issues.
Get a Home Inspection
One of the best ways to know if a condo is in good shape and will last you a long time is by getting a home inspection. This way, you can avoid buying a unit that has expensive issues that might not be apparent at first glance.
Even if your condo comes with a warranty, it usually doesn’t cover specific items such as faulty electrical, plumbing, and roofing. You can rest assured that you’re not buying a money pit by getting a home inspection.
Meet the Neighbors Before Buying
If you haven’t already, make sure to meet the neighbors before buying a condo. This way, you will have a good idea of the community and how much interaction you might have with the other residents.
Meeting them might be as simple as stopping by or knocking on their door as they are likely as eager as you are to get to know the community. You can also tell what kind of neighbors you would have by looking at their units and noting whether they have a front or backyard.
If you can, also take note of the type of cars parked outside as this might give you an idea about what kind of people live there and what kind of neighbors they would be.
Buying a condo can be a significant investment, but it’s essential to be informed to know what you are getting yourself into. By doing so, you can avoid any costly mistakes.
Therefore, if you’re still unsure about whether a condo is the right place for you, consider the following answers to common questions.
Why should you never buy a condo?
There are several reasons why you should never buy a condo. The most important reason is that condos *might* lose value faster than houses, depending on the location and supply/demand. In addition, there is a limited supply of condos in some markets, while homes might be more abundant.
Other reasons include lack of space, HOA rules and regulations, expensive maintenance fees, and living near noisy or nosey neighbors.
Are buying condos worth it?
Yes, buying condos can be worth it for many people. Condos can give you the feeling of home-ownership without the responsibility and maintenance that comes with owning a detached house.
When buying a condo, you will need to factor in the cost of living to know how much money you’ll likely spend each month on groceries, utilities, and other necessities. You should also factor in the cost of the mortgage, HOA fees, and additional associated costs.
When budgeting for a condo, make sure to leave yourself some wiggle room in case of unexpected repairs or maintenance fees. By doing this, you’ll be less likely to put yourself into debt and can enjoy all that living in a condo has to offer.
How long can you live in a condo?
Typically, you can live in a condo for as long as you want to. However, specific rules need to be followed when renting out your unit. Many HOAs do not allow renting without getting permission from the board first, and it’s essential to abide by these rules, or you could face heavy fines or even risk additional consequences.
You should also make sure to get the board’s approval before subletting. Other than that, though, there are no restrictions on how long you can live in a condo. Since you own your condo, you can stay as long as you are paying the monthly mortgage, taxes and HOA fees.
Is it better to buy a condo first?
If you’re new to the real estate world, buying a condo first might be a good idea as it is less risky than buying a house. When purchasing a condo, you will need to factor in the cost of living to know how much money you’ll likely spend each month on groceries, utilities, and other necessities.
You should also factor in the cost of the mortgage, HOA fees, and additional associated costs. Of course, everyone’s situation is different, and one should always do what will work best for them. Remember to always consult with a real estate agent or financial advisor before making any large purchase, including a condo.
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About the Author: Kris Lippi is the owner of ISoldMyHouse.com, the broker of Get LISTED Realty and an official member of the Forbes Real Estate Council. He actively writes about real estate related topics such as buying and selling homes, how-to guides for around the house and home product recommendations. He has been featured in Inman, Readers Digest, Fox News, American Express, Fit Small Business, Policy Genius, Lending Tree, GoDaddy, Manta as well as other major websites. Read more about us here.