Condos are a perfect solution for many people who want to build equity without taking on all the burdens that come with owning a single-family home. All told, you’ll be able to enjoy greater amenities with fewer responsibilities (and probably for less money). But there are a few downsides to keep in mind before buying a condo. These facts should be considered Buying a Condo 101, so make sure you think about them carefully and really understand the situation:
- You Won’t Be Able to Expand Easily
Many real estate first-timers look at buying condos because of their affordable price points. But keep in mind that you won’t easily be able to expand — and since the markets in many cities are flooded with condos, there’s no guarantee you’ll be able to sell your condo and move quickly when you’re ready to start a family or otherwise change your lifestyle.
This is one reason that people who are downsizing, typically parents whose children have all moved out of the house, make up such a high percentage of condo owners. But a condo is a great choice for anyone who can see themselves living in the smaller space for at least five years.
- You’ll Have Less Autonomy
Before buying a condo, you’ll need to decide if the restrictions of the condo association are acceptable to you. Condos and townhouses sometimes ban pets, smoking, large parties or even certain decorating choices. And if you get other residents to agree with you on an issue, you’ll need to go through the condo board to approve any changes.
These rules can be a good thing, since they’re put in place to create a comfortable living situation for all the owners. But you need to make sure you’re patient enough to go through official channels.
- Condo Fees Can Be Significant
Buying condominium space comes with not only a mortgage, but also condo fees. These fees are used for property maintenance and major projects like outdoor painting and re-roofing. Monthly fees vary, but are generally in proportion to the amenities and services provided.
If you’re not great at saving on your own — a vital skill if you own your own house — then paying a little every month might be a relief. Just remember that condo fees tend to increase over time, so you’ll still see that expense go up even if you pay off your mortgage. Before buying a condo, you should also ask to see the condo association’s budget from recent years to ensure it regularly keeps within its budget and has reserves. If there are budget shortfalls, you may get hit with a “special assessment” to cover necessary costs.
Once you investigate all these aspects and know that these downsides aren’t a deterrent for you, you’re ready for condo shopping! Enjoy sipping your drink by the pool you’ll never have to clean.
Have you been going through the condo vs. home debate? What have you decided thus far?