If you’re in the market for a home, you should consider the pros and cons of buying a condo versus buying a single family dwelling. While everyone has their own preferences, there are some differences between homes and condos that you should know.
What's in this article?
When Buying a Condo, Consider:
– HOA Fees: If you buy a condo, you’ll become part of a Homeowners Association. You’ll have to pay monthly dues that cover the cost of maintaining common grounds, any amenities, and so on. The cost of the monthly fee and what it covers can vary dramatically by HOA. You might find that the fee is too exorbitant, especially on top of your mortgage payment, or you might find that it is extremely reasonable in light of what you get in return.
– HOA Management: You should review the Homeowners Association’s financial papers to ensure that it is fiscally sound – you don’t want to buy a condo and then have to pay a special assessment on top of your monthly dues for emergency repairs because the HOA doesn’t have adequate financial reserves. You may also want to review the minutes of the HOA Board of Directors to see what sorts of complaints are filed by residents, how they are resolved, and other issues that the board deals with.
– Restrictions imposed by CC&Rs: The Homeowners Association is responsible for enforcing the Covenants, Conditions, and Restrictions (CC&Rs) that govern all of the condo units. CC&Rs are the rules that everyone agrees to live by, such as maintaining a uniform look for all units, keeping noise levels down, the number of parking spaces allocated per unit, etc. You will want to review the CC&Rs carefully before purchasing a condo to make sure you can live by the rules.
Let’s Get Your Loan Started
– Amenities: Condos can have extravagant or minimal amenities (and of course, this affects the cost of your monthly dues). There may be a pool, gym or basketball court, a common room available to rent for parties and events, a garden area, concierge service, security, etc. Find out exactly what’s included in the monthly HOA fee and you may be pleasantly surprised.
– No outside maintenance: As mentioned above, the HOA will generally maintain all common areas of the property. This means that even if your building has a pool or garden, you aren’t personally responsible for them.
– Laundry facilities: Not all condos have their own laundry hook ups. If you don’t want to lug your clothes to a common laundry room, be sure to look for condos that have their own washer and dryer, or at least a place to install them.
– Parking: The parking situation for condos can vary widely from tandem spots to private garages. You’ll have to figure out what you can live with, and whether there is adequate guest parking for your needs.
– Privacy or the lack thereof: You’ll have less privacy with a condo than you would with a single family dwelling since your neighbors will be much closer. However, that very closeness can provide some security if that’s a concern.
– Lower insurance costs: Because you will probably own less property, and because the HOA will have its own insurance policies, your insurance premiums should be lower as compared to insurance for a single family dwelling. However, keep in mind that you will need to know what’s covered by the HOA’s policies, and ensure that your homeowner’s insurance policy complements them so that you are adequately insured.
– Lower property taxes: Property taxes are based on the value of the property itself, and since your condo is likely to be worth less than a single family dwelling in the same neighborhood, your property taxes will be less too.
If you’re thinking of buying a condo, it’s important to know the major differences between single family homes and shared space dwellings. With this knowledge in hand, you can be sure you’re making the move that’s right for you.