Buying a condo simplifies homeownership, as condo owners typically have less maintenance compared to those owning detached single-family homes. Condo associations, also known as homeowner’s associations, take care of building maintenance and manage shared amenities. This convenience can be appealing to many buyers, but it is important to be aware of the responsibilities and costs associated with condo ownership.
What Defines A Condo?
The term “condo” is short for “condominium,” referring to an individual unit within a property containing multiple units. Condos come in various forms, such as apartment-style units and townhomes. These buildings can range from just one or two units to large high-rise structures with many units. Condos may be attached or detached. When someone buys a condo, they acquire their individual unit along with a share of the common areas and amenities, which can include swimming pools, gyms, and parks. While the condo owner has full ownership of their unit, they also hold partial ownership of the shared amenities and areas. Owners pay fees to cover the association’s expenses, which might include hiring a property management company for maintenance. Additionally, there may be various miscellaneous fees that differ by property. Condo owners are responsible for their property taxes, utilities, and the upkeep of their unit.
The Difference Between Condos and Houses
One of the main differences between condos and houses is their price. Condos generally sell for significantly less than single-family homes, primarily because they usually have less square footage and don’t typically include backyards. However, interest rates for condos are often higher, and lenders usually require a larger down payment. This is because lenders consider condos to be riskier investments compared to single-family homes. The value of each condo unit can be affected by other units in the complex, meaning one problematic owner or a prolonged vacancy can negatively impact the value of all the units.
Real Estate Agents
Prospective condo buyers should start their search by finding a real estate agent who specializes in the condo marketplace. Because there is more to buying a condo than the sale transaction, it is best to have an agent who can guide buyers in condo-specific areas like condo association bylaws and rules.
Property Management Competence
One of the first questions prospective condo buyers should ask is, “Who will be maintaining the property?” Poor maintenance can lead to shared areas and amenities becoming rundown, making life in the condo unpleasant and decreasing the value of the units if owners decide to sell.
Owner Lifestyle
Single-family homes are ideal for owners who enjoy, or at least don’t mind, yard work and maintenance tasks. On the other hand, condos are better suited for those who have no time for mowing lawns and raking leaves and prefer not to hire someone for these chores. Condo owners need to be comfortable with apartment-style living, as they will typically be in close proximity to their neighbors. One of the trade-offs condo owners make is exchanging some privacy for convenience.
Desired Amenities
Condo owners can get a range of amenities, from basic ones like maintenance of common areas, to swimming pools and gyms. These amenities factor into the condo owner’s enjoyment of the property, but they will also be important if they decide to sell. A condo with fewer amenities will cost less but will also sell for less.
Special Assessments
In some cases, the condo association may need to impose special fees, known as special assessments, to address unforeseen issues like emergency building repairs. These assessments are typically voted on by the condo association’s board or by all the condo owners. When considering a condo, potential buyers should factor in the possibility of special assessments, as they can impact the overall cost of the unit. A buyer might find themselves paying for the down payment and closing costs, plus an additional amount for a special assessment. Instead, buyers should use the assessment as a negotiation tool with the seller, requesting that the seller deduct the cost of the special assessment from the sale price.
Condo buyers transitioning from renting an apartment will find condo living particularly well-suited to their needs. Owning a condo offers former renters the freedom to customize their living space while enjoying the benefits of homeownership. For those who prefer the apartment lifestyle, condo ownership provides the perfect balance of maintaining a familiar living environment while also building equity and investing in their future.
