It’s a question that comes up for anyone who’s looking to buy a house, especially in an urban area: Should I buy a condo instead?
For those who don’t know, a condominium is like a hybrid between an apartment and a house. Like a house, you buy a condo and own it outright. But some elements of condo living are similar to apartment living. For starters, many condos are adjacent to others, so owners often share a wall and live in close proximity. And if you live in a high-rise building, your condo may be located above or below someone else’s.
If you talk to friends or family members who live in condominiums, you’ll quickly find out that many people love the condo life, while some people wish they bought a house instead.
So what are the pros and cons of condos? Here are a few reasons you may be drawn to one — or repelled.
No yard to mow. This is a big appeal of owning a condo. There will be no mowing because you’ll pay dues to a condominium association, which will take care of most of your maintenance needs.
“As a first-time homebuyer, it’s enough to get your arms around the internal furnishings and such and a relief that you don’t need to worry about landscaping, yard maintenance and physical labor activities like snowplowing and road maintenance and roof repair,” says Sandra Rodriguez, a communications director in Hartford, Connecticut. She lived in a condo during her first marriage and says after her divorce, she appreciated avoiding those hassles during that stressful time. “Paying the condo fee was a pleasure versus worrying about those things,” she says.
[Read: A Checklist for First-Time Homebuyers.]
Mark Scott, a communications executive in Atlanta who has owned houses but now lives in a condo, feels the same way. “I find so many friends have these giant yards that they never use and yet have to spend hours doing yard work themselves or pay thousands of dollars a year for someone else to do it,” he says. “Again, for something they never really use.”
But buyer beware. Having the outdoor workload managed isn’t always peaches and cream, however. Lance Luke, who owns Construction Management Inspection LLC, a Honolulu-based firm that inspects buildings including condos, points out that “some condos are underfunded and therefore have no money in reserves to pay for capital improvements such as concrete and wood repair, painting or roofing.”
Not surprisingly, condo owners falling behind on association dues was a problem during the recession. It’s important to make sure the association is well-run before buying a condo, and find out how many condos the association manages. If a dozen members struggle with paying dues in any given month and your community has 500 condos, you aren’t likely to feel those effects. But if you live in a community of 10 condos and two people fall behind, there goes 20 percent of the association’s budget.
It’s cheaper than buying a comparable house. Obviously, the cost of a condo versus a house depends on the size of the home, the property values of the neighborhood and the cost of living in the area. But typically, you’ll spend less on a condo, “especially in higher-cost markets where condos can be the only alternative to high-priced, single-family homes,” says Amy Tierce, a regional vice president with Wintrust Mortgage in Needham, Massachusetts.
How much cheaper is a condo? As an example, Tierce says if you were to buy a 2,400-square- foot town house condominium in a pricey Boston suburb, you might pay $725,000. Meanwhile, a similar-sized, single-family house in the same area would cost just over $1 million.
Jason McCoy, a voice-over artist in Salisbury, Maryland, agrees that buying a condo is cheaper. He says that when he lived in a condo, “the mortgage was low, so the overall expense was manageable on one income if it ever came to that.”
But buyer beware. The price of the condo isn’t all you’ll pay. Remember to factor in association dues. You could shell out anywhere from $100 a month to more than $1,000, depending on the location and whether you’re looking at a luxury or no- frills condominium community. But know that if a condo has 24-hour gated security and a first-class gym or swimming pool, residents have to help pay for those extras.
You could also find yourself on the receiving end of an assessment. What’s that, you say? Every month, a portion of your condo fees goes into the development’s reserves. That’s where the condo association gets the money to fund occasional projects, such as repainting the building’s exterior. If an expense can’t be delayed – – let’s say a pipe burst and there isn’t enough in the reserve to cover repairs — condo owners could be asked to pay an assessment, which can range from a minor pittance to thousands of dollars. These unexpected financial hits aren’t pleasant, but unplanned expenses occur frequently with houses as well.
[Read: The Real Story Behind HOA Fees and Special Assessments .]
Also keep in mind that condos can be harder to sell than houses. You can brag to homebuyers about your spacious bedrooms or all the amenities in your condo building, but if many of your neighbors are selling, there may not be much to distinguish your condo from theirs.
There is a sense of community. Plenty of homeowners would say the same thing about their own neighborhood, but as noted, condo owners tend to live in much closer proximity than many suburban homeowners, who often have relatively big yards separating them.
“There are always social moments that occur throughout the day. Whether it be to take the trash out or pick up the mail, there are opportunities that one just doesn’t get in a home,” says Michelle Payer, a New York City condo owner who also owns a public relations firm.
But buyer beware. The reasons Payer loves condo life are the same reasons some owners hate it. “You don’t choose who your neighbors are. If you get a bad one, you’re stuck with them for a long period of time. Imagine it being midnight and waking up from your neighbor’s pool party noises,” says Rose Swanger, a certified financial practitioner in Knoxville, Tennessee, who owns a condo but now rents it out.
McCoy decided he wasn’t a fan of the condo life for similar reasons. “We’d hear neighbors listening to their entertainment sound systems, which sounded like thunder,” he says.
[See: 8 Home Remodeling Projects That Are Worth the Money .]
He says he also sometimes found it challenging to work in his spare bedroom. “I had to work around outside noises like lawn mowers and cars with loud bass,” says McCoy, who now owns a house but also rents out his condo because he has had trouble selling it.
Of course, some homeowners — especially those with small, narrow yards — will tell you they also have noisy, unpleasant neighbors. Depending where you call home, many of the complaints one can make about condo living can frequently be lodged at a house as well.
So the grass is rarely greener on the other side of the fence. But at least on one side of the fence, you’ll never have to mow the lawn.
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3 Reasons to Buy a Condo — and 3 Reasons to Beware originally appeared on usnews.com
