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The pros and cons of buying a condo in today’s market

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No two prospective buyers are alike when it comes to what they look for in a new home. An ideal property will appeal to the interested party’s lifestyle and taste. It will also accommodate any work and family requirements. Knowing all of the real estate options available to you can make narrowing down your list much easier.

One option you might consider is a condominium, or condo for short. If you’re looking for a home with little maintenance and a strong sense of community, this may be the right option for you. To give you a realistic look at what it would mean to own one of these homes, we’ve put together a few of the pros and cons of buying a condo. We’ve also included some helpful tips for getting the most out of your condominium association. Jump down to the infographic or read further to learn whether condo living is suitable for you.

What is a condo?

Condos are frequently confused with apartments. Though similar in some respects, condos fall into their own category of real estate. While you lease an apartment from the landlord, condos are privately owned units located within a larger community. With shared amenities, common spaces and outdoor maintenance services, condos are perfect for those interested in owning their own property without all the added responsibilities that come with homeownership.

Is buying a condo worth it?

Based on all the options available to buyers, is buying a condo worth it? The honest answer is it really depends on what you’re looking for. Buying condo property allows people to live in locations that would be otherwise unavailable if they didn't want to sacrifice their lifestyle or other conveniences like public transportation. They also allow people to build equity and utilize tax deductions on mortgage interest, unlike those residing in apartments.

However, it’s important to call attention to the additional fees associated with a condo purchase that frequently catch buyers off-guard at the last minute. Factor in these monthly expenses when considering a condo purchase.

The following example represents monthly fees from a $350,000 condo with a 4% interest rate and 10% down payment:

 

Example monthly condo fees

Principal and interest

$1,461

Association dues 

$250

Condo insurance 

$100

Mortgage insurance

$120

Property taxes

$250

Total 

$2181

 

The pros and cons of buying a condo

Think you’re interested in buying a condo, but not sure if it’s the right fit for you and your lifestyle? No problem. Read further for a few of the pros and cons of buying a condo that will help you determine whether this is the smartest option for you to pursue.

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The pros of buying a condo

 

1. Maintenance and repairs off your plate

Condos offer prospective buyers the ability to earn equity like a homeowner without the pressure of maintaining the home's condition or surrounding property. Your condo association will take on the responsibility of shoveling, landscaping, painting or paving any exterior part of the home. Though this does come with a required monthly fee, the benefits may outweigh the cost if you're not interested in upkeep.

2. Luxurious amenities

As a condo owner, you co-own all the shared spaces and amenities offered by building management. From basketball and tennis courts to state-of-the-art gyms and outdoor swimming pools, there are some amazing condo communities out there offering many luxurious amenities that are inaccessible for those purchasing a standard single-family home.

3. Affordability

Buying condo property offers more ownership opportunities to prospective homeowners. Their price difference compared to other types of real estate make them an attractive alternative to look into. You’ll find that condos are typically cheaper to purchase than standard homes. The average price for a condo in 2021 was $289,000 while the cost of a single-family home was $334,500. This added wiggle room in your budget will let you sift through prospective condo properties and strongly weigh your options when it comes to the amenities and guidelines that are most suitable for you.

4. Move-in ready

Some condos can be bought fully furnished. This removes the stress of lugging large pieces of furniture and decor into your new space. And if interior design isn't your forté, you won’t have to worry about going through design layout options that will bring your place to life.

5. Sense of community

Condo owners become part of a larger community once they move into their new homes. With a closer proximity to neighbors, you’ll be able to foster meaningful relationships with surrounding homeowners to potentially become life-long friends. It’s important to keep in mind that not all communities are structured like this, so do your research when looking into potential properties.

6. Security

Condo complexes often provide residents with security features, such as call boxes, 24/7 guard patrol and doorman services. The larger sense of community will also help you feel more relaxed when leaving your home for extended periods of time.

7. Improvements

Unlike an apartment, you fully own your property after you purchase. This gives you free rein to tackle the home improvement projects you want to take on to make the place feel more like you. Paint as many bedrooms and drill as many holes as you’d like. There won't be anyone stopping you!

8. Accessibility

Many condos today are located in different cities full of life and energy. This is great for people looking to explore new restaurants, shopping boutiques and concert events. The close proximity can also make walking an ease, saving tons on transportation expenses like gas and routine maintenance.

These condos are also great for working professionals uninterested in sitting in hours of traffic during their commute. With a home close to a city-based job, you can get to work with less stress and hopefully a smile on your face.

9. Condo associations

There are many benefits to having a condo association. Funded by current residents, this board acts as an overseer when it comes to upholding community rules and regulations. They’ve also taken on the responsibility of making sure you're comfortable in the community you’ve chosen to live in. From preventing large gatherings that’ll keep you up past 12 a.m. to organizing community events, they want every resident to always be happy and comfortable where they live.

10. Equity

If you’re not ready to give up apartment amenities or your sense of community but would like to establish a financial future for yourself, condos can be the right option for you. That’s because condo owners can earn equity on the home they’ve purchased.

Home equity is the total financial portion the homeowners possess after their initial investment and monthly mortgage payments. By contributing on a monthly basis, you have the chance of increasing your property value. This puts more money back into your pocket should you decide to sell.

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The cons of buying a condo

 

1. Fees

The luxurious amenities provided by condo complexes come at a cost to the residents. To maintain the property, security services, fitness centers and outdoor pools, the condo association charges a monthly fee. And after reviewing our breakdown of potential fees above, you can see that this is also added on top of your mortgage and other expenses.

It’s important to keep in mind that association fees have a tendency to increase on a yearly basis. To avoid the risk of pricing yourself out of your home, make sure you have increased fees factored into your budget.

2. Condo association regulations

Choosing to live in a condo means you have to abide by community rules. For example, there could be pet restrictions and guidelines as to when and where you can host events. Also, there could be a limit to the number of cars allowed per unit.

Always ask questions regarding community rules and regulations when searching for a condo. This will ensure the community aligns well with your lifestyle.

3. Resale challenges

Condos can be difficult to resell because of the narrow pool of buyers interested in these properties. Families with multiple kids often want yards and some people may be turned off by the idea of living by someone else’s rules.

The costs associated with condo living also make the buyer pool smaller. The condo association could demand fees higher than a prospect can afford. And with the potential of those fees rising in the future, it makes purchasing the home a greater financial risk.

4. Lack of privacy

Some might view the apartment-style design of condo communities as a downside. You could potentially live above or below someone, hearing all their celebrations or arguments. You might want to rethink this option if you’re coming from an apartment complex and can't handle another rowdy neighbor disturbing your peace.

5. Delinquency

A condo community relies heavily on the financial contributions of its residents to keep things running smoothly. When others fail to keep up with their association dues, the remaining residents are responsible for taking on the extra weight.

6. No land ownership

When you purchase a condo, you’re only buying the property, not the land beneath it. You and the other community members own an interest in the land together. When you buy a home, however, you purchase both the property and the land it’s on. But if you're not interested in outdoor maintenance, this could actually be an advantage!

7. Limited storage

Condos generally don’t come with as much storage space as a home. This will limit the amount of personal possessions and large items you can keep in your unit. Some complexes offer additional storage units, but they are often not large enough to house significant items.

How to get the most value from your condo association

Condo associations are arguably one of the most undervalued features that come with condo living. Not taking the time to understand what they do and what they have to offer puts you at a great disadvantage. Here are a fews ways to get the most out of your condo association and surrounding community:

Read governing documents

All condo associations have governing documents outlining their rules and regulations, bylaws, and covenants, conditions and restrictions (CC&Rs). These outline resident and managerial responsibilities as well as any other community processes. You have a right to view every document to get a better understanding of how the community operates successfully.

Take advantage of services offered

One of the biggest benefits of living in a condominium is having access to services and amenities not accessible when purchasing a home. From pools and spas to fitness centers and clubhouses, condo associations provide immaculate services for their residents.

Understand the reasoning behind rules

The guidelines set in place by your condo association are not meant to make your life tough. Their job is to make sure that they consistently maintain a safe and enjoyable community for all homeowners. And with their efforts, property values remain attractive to prospective buyers.

Understand your responsibilities

The condo association is responsible for the upkeep and maintenance of your community. Make sure you read your community guidelines to understand where your responsibilities fall. The last thing you want is to be paying for repairs that your community is contractually responsible for fixing. You also don’t want to bring issues that aren’t their responsibility to fix. If a repair is needed inside your walls, your condo insurance will usually cover the cost.

Get involved

From participating at board meetings to attending community events, there are several ways to get involved in your condo association. You’ll get to know how your community works and the individuals making important decisions.

If you think a condo could be your next home, you just need to consider whether your lifestyle is suitable and if you can financially commit to the property. After reading through some of these pros and cons of buying a condo, we hope you’re able to better weigh your options to bring you one step closer to the home — condo or not — of your dreams.

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Kristine Lee
Kristine LeeManager, Content and Data

Kristine is a licensed insurance agent who joined The Zebra in 2019 as an in-house content researcher and writer.

She is an authority on all things insurance and covers the ins and outs of auto, home, life and renters insurance. Her specialty is in providing data-backed insights and information to help insurance shoppers make informed decisions.

Kristine's insurance expertise and research have been cited by publications such as CNBC, Car and Driver, Business Insider, Yahoo!, The Balance, Nationwide and Elephant.