The Truth about Buying a Condo
Often those looking to get out of the rent race think that they only have one option when it comes to buying a home- a single-family home in the suburbs.
But condos may be better suited to first-time and seasoned buyers alike.
Condos are different than single-family homes in many ways and the can fit a variety of lifestyle ranging from young, professional families just starting out to those wishing to downsize. Only you can decide which is best for you. But here are some benefits and cautions of condo living that can help you make an educated choice.
- More convenience.
Some community associations take care of interior maintenance of things such as the electricity and the plumbing. This reduction of responsibility can be a huge plus for those just transitioning into homeownership, or those using the condo as a second or vacations home.
“Condos offer comfortable low maintenance living in the inner city, close to public transportation or suburbs and help with simplifying life,” adds Lisa Gaimara (NMLS# 501353) a Loan Officer with Supreme Lending.
- Increased amenities.
Condos can offer amenities that would be too expensive in single-family houses such as gyms, pools, or parking garages.
- Cheaper insurance.
Depending on the type of master policy the condo association has, homeowners insurance for a condo may be cheaper than for a single-family home of similar value. “HO6 policies are typically a fraction of the cost of your normal HOI policy for a single family home and can be adjusted to cover many more personal items at a much lower cost,” Gaimara said.
- A built-in social group.
Because you will be so close to your neighbors, you will likely have increased opportunities to meet people. Condos associations also have meetings which give you a chance to become involved in the community and meet others who are doing the same.
- Lower utility and maintenance fees.
The cost to maintain a small property is much lower than the cost to maintain a large property. Even in a relatively large condo, you are not paying for items such as your roof, windows or driveway. While these costs do come out of your HOA fees, you are again sharing the cost with a number of homeowners. Condos can also be less expensive to heat, cool, furnish and clean than a large home. You can also say goodbye to mowing and trimming!
- Reserve funds.
These are funds set aside by the condo association for making repairs to the shared areas of the property. Ask about the level of funds prior to purchasing. If the reserves seem low, it can be a sign of poor management or that you will be expected to help cover costs of repair to any communal areas.
- Association rules.
Purchasing a condo requires all residents to abide by the association’s guidelines. Be sure to review all guidelines prior to deciding to buy and make sure they are ones you can live with. “It’s also important to note that any litigation against the condo association could negatively impact the ability to buy or sell the individual condos,” adds Robert Cenci (NMLS# 460216) a Supreme Lending Branch Manager.
- Condo fees.
While many condos do have more amenities available to their residents, they also usually come with association fees. These monthly costs go toward shared property maintenance, security, and more. Be sure to factor these into your budget when determining if you can afford a condo.
Houses have rooms for multiple kids, offices, or guest rooms. They also tend to have garages with space for cars and extra storage. And while you won’t have to mow your yard in a condo, you also won’t have a backyard for summer BBQs or get-togethers.
- Challenging to sell.
Condos can be difficult to sell because they pretty much all look the same. There are many specific guidelines that must be followed to obtain a conventional mortgage or even a FHA mortgage on a condo. “Investor penetration, how many units are rented vs. owned, project FHA approved, etc. can play a difficult part in a buyer obtaining financing,” cautions Gaimara.