If you’re thinking about purchasing a home, buying a condo might look pretty appealing. After all, you don’t have to worry about exterior maintenance, you get a pool you don’t have to pay for or keep clean, and you get an awesome fitness center (which saves money on your gym membership).
It’s like an apartment that you own. What’s not to love?
Like everything in life, there are pros and cons to buying a condo. Before you sign on the dotted line, it’s important to weigh these important factors, and remember some key questions to ask when buying a condo.
Pros of Buying a Condominium
- Security. Many condos offer gated or locked entries, doormen, or even security professionals for residents. If you live alone, or security is a concern for you, this can be a major perk. In addition, you’re living in close proximity with many other people; in an emergency, you’ll have plenty of people to turn to for help.
- Amenities. Want a pool? A fitness center? Wednesday game nights at the community clubhouse? Many condo communities offer residents amenities that are out of reach for the average homeowner.
- Maintenance. One of the biggest benefits to living in a condo is that other people do the maintenance for you. They cut the grass and maintain the grounds, they fix the roof, and there are plenty of workers on hand for when your furnace quits. If you’re a first time homeowner, in poor health, busy with work, like to travel, or you just don’t want to deal with all that work, this is a major benefit to living in a condo.
- Affordability. Condominiums are often priced lower than single-family homes. If you want to dive into home ownership, a condo can be a great first step.
Cons of Condo Living
- Homeowners Association Fees. As you might imagine, that pool, fitness center, security system, and maintenance crew all cost money. And, that money is paid by you. When you buy a condo, you essentially become a business partner in that community. You pay a monthly fee each month (on top of your mortgage) which goes towards the upkeep of the property, as well as future investments (e.g. a playground addition or dog run). How much will you have to pay each month? HOA fees vary widely, depending on the location, size, and quality of your community, but plan on spending at least $300 a month in association fees. It’s not cheap.
- Lack of Privacy. Remember when I mentioned that a condo is essentially like an apartment that you own? Well, you get all the “perks” of apartment living too; and this includes neighbors on the other side of the wall, and neighbors going up and down the hall or grounds at all hours of the day and night. If you’re looking for some peace and quiet around you, a condo may not be the right choice.
- Delinquency. Condos have been hit hard by the recession. As more people struggle to make ends meet, more condo owners are dropping out of paying their association dues. What happens in this case? Dues go up for everyone else to cover this delinquency. This means you’re stuck holding the short end of the stick.
- Challenging to Sell. Condos can be difficult to sell. Why? Well, they pretty much all look the same. If there are empty units in your building, those are likely going to sell first. And if there are a lot of empty units…good luck.
- Living by the Rules. Living in a condo means you have to live by the management’s rules. For instance, say you want to install green energy technology like a solar panel on the roof to save energy at home. Instead of just getting started, you have to ask the condo association if it’s ok. If they say no, you’re out of luck. There are many rules for living in a condo; for some people, this can be stifling.
- Slow Appreciation. Condominiums often appreciate in value much slower than single-family homes. This is because you don’t own any land, which is the biggest driver for appreciation. Instead, you only own the living space. There’s a big difference.
Buying a condo is no small affair, and it’s often more involved than just buying a single-family home. You also need to weigh the significant pros and cons before making any final decision.
Do you live in a condo, or have you owned one in the past? What was the overall experience like? Was it worth the investment, or will you never buy a condo again?