When you first start looking for a home, you’re like to come across listings for condos in your area. Many people aren’t aware of the differences between single-family homes, condos, and townhomes. If you’re wondering whether buying a condo is the right move for you, we’ve created this blog full of must-know tips.
What Is a Condo?
“Condo” is short for a condominium. Condos are similar to apartments and tend to be located in a building or group of buildings. They are generally much smaller than single-family homes — making them ideal for young professionals and empty-nesters.
Condos became extremely popular in the early 1960s due to the Housing Act of 1961. This act stated that the Federal Housing Administration (FHA) could back mortgages on condos (which was previously not allowed.) With a boost of federal cash, many homeowners started buying the more affordable condos in large numbers.
Is Buying a Condo Different From an Apartment?
The most significant difference between condos and an apartment is that individuals own condos. In contrast, apartment units tend to be owned by a single landlord or company that rents them out.
In a condominium, a homeowners association (HOA) is responsible for managing any common spaces. The HOA, or board, is typically elected by the residents of the condo. Residents pay fees or dues for things like landscaping and maintaining the amenities. Sometimes a big expense might arise, such as a damaged roof — in this instance, the association will levy a special “assessment” that increases dues to complete the repair.
What are the Advantages of Buying a Condo?
There are many benefits of purchasing a condo over a single-family home. Some of the most common reasons include:
Condos tend to cost less to purchase than single-family homes. This makes them popular with first-time homebuyers or seniors looking to sell their home and bank their equity.
A condo is an excellent way to downsize. Not only do you not have to worry about maintaining the exterior of your home, but you don’t even have to mow your lawn! This is convenient for homeowners short on time or who find manual labor difficult.
Condos are exciting investment opportunities because they tend to rent out quickly. In addition, the HOA takes care of home maintenance, leaving less for the landlord to worry about.
Many condos come with additional amenities, such as communal gardens or shared pools. This gives the added benefit of enjoying leisurely activities without having to upkeep the space.
What are the Disadvantages of Buying a Condo?
Condos aren’t suitable for everyone. Here are some potential disadvantages to owning a condo.
Covenants and Rules
Condos often have strict rules and covenants controlling what homeowners can or can’t do to their property’s exterior. Even small things, such as having fairy lights on your balcony, or wind chimes, can cause problems if the HOA rules say so. Before purchasing a condo, you must read the bylaws and regulations thoroughly. It’s crucial that you understand what is expected of you as a homeowner and determine whether you can live under those rules.
Expensive HOA Dues
HOA fees rarely stay the same forever. Typically HOA fees will increase, depending on your community’s needs and any additional services it includes. Although a well-run HOA can be a pleasure to live under, a poorly run HOA can severely impact your quality of life. Be sure to research HOA increases and special assessments before you purchase a condo. This can help prepare you for potential increases in fees and dues.