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Jennifer Bradley Franklin
Jennifer Bradley Franklin
Jennifer Bradley Franklin is a multi-platform journalist and author, often covering finance, real estate and more.
Jennifer Bradley Franklin
April 20, 2021/7 min read
Suzanne De Vita
Suzanne De Vita
Suzanne De Vita is the mortgage editor for ubraintv-jp.com, focusing on mortgage and real estate topics for homebuyers, homeowners, investors and renters.
Suzanne De Vita
April 20, 2021/7 min read
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For some house hunters, the thought of maintaining a house and a yard conjures up anxiety. Luckily, there are different kinds of properties to choose from that don’t entail a lot of upkeep — and come at a reasonable price to boot. One of those options is a condominium.
What is a condo? Should you buy one? Here’s a primer on condo living to help you decide if it’s right for your lifestyle.
What is a condominium?
A condominium, called “condo” for short, is a privately-owned individual unit within a community of other units. Condo owners jointly own shared common areas, such as pools, garages, elevators and outside hallways and gyms, to name a few. While condos are usually found in high-rise buildings, you can find detached condos in some markets.
“A homeowners association typically manages the common areas and oversees the covenants, conditions, and restrictions (CC&Rs) that apply to the property,” explains Holly Leonard, a real estate agent and owner of Haven Real Estate Brokers in Atlanta. “Condominiums are often referred to as a ‘common interest development.’”
Why buy a condo?
For many buyers, the answer to this question is simplicity. With most condo developments, you only have to take care of the interior. All the rest is handled by a professional management company. There’s no lawn to cut, flowerbeds to maintain or driveways to be cleared of snow.
Another important piece is the price tag. Condos have historically been more affordable than single-family homes, and that trend continues today. In fact, condos appreciated at a slower pace than that of single-family homes in 2020, according to Black Knight data, and sold for approximately 17 percent less, representing a savings of around $58,000, real estate brokerage Redfin reports.
Condos are often cheaper in terms of taxes, too: A smaller space means a smaller bill from the county.
There’s also a community life that single-family homes often don’t provide, including shared spaces and amenities, events and more. It’s a lot easier to take off and pursue travel or live seasonally in another area with the peace of mind of knowing that once you lock the door, everything will be taken care of.
Factors to consider before you buy a condo
What is the difference between an apartment and a condo?
Structurally, condos and apartments can look the same, but the key difference between a condo and an apartment is ownership: You own a condo, and you rent an apartment. (In some limited markets like New York City, however, you can buy an apartment.)
Both kinds of dwellings typically have multiple floors and units on each with shared amenities and common areas, such as a gym, pool and parking. In some communities, condo owners can rent their units to tenants, too.
What is the difference between a condo and a house?
If you live in a condo, it’s your home, but it’s not a house. That’s an important distinction, particularly when it comes to maintenance.
Consider if you owned a detached single-family house and the roof needs to be repaired. As a homeowner, that expense would fall entirely on your shoulders. If you owned a condo, that cost would likely be split between other owners in the community, and a portion of it might also be paid for via the reserves of the homeowners association.
Sharing expenses can be helpful, but it’s important to note that condo owners often must follow additional rules and community restrictions. For example, there could be aesthetic requirements to adhere to, such as a mandate to install the same windows as every other unit. Simply put, you might not have complete control over the decisions about your condo, whereas with a house, you’ll have much more latitude.
Should I rent or own a condo?
Your finances will be the main deciding factor that answers this question. As with any home type, when you buy a home, you’ll need a large sum of money for a down payment, as well as closing costs, says John Ameralis, a licensed real estate broker with Compass in New York City.
Renting a condo can also be a good opportunity to test out a particular building or area of town before making a long-term ownership commitment.
Pros and cons of living in a condo
If you’re thinking of buying a condo, it’s important to weigh the benefits and challenges so your decision suits your lifestyle and budget. Here are some top things to consider.
ProsLower-maintenance living: Since most, if not all, exterior maintenance on condos is handled by the HOA, “condos are best for buyers who don’t want the higher maintenance (responsibility) of owning their own house, such as mowing their lawn, fixing a leaky roof, etc.,” Ameralis says.Sense of security: Some condo communities have security staff, and the entrances are more difficult to access from the outside than single-family homes or townhomes. “Many single people do not like living alone, and condo living makes them feel safer,” Leonard says. Depending on the building, you might have secure entrances and parking, a doorman or concierge and other amenities that increase security and safety. This can also be a perk if you work odd hours or travel frequently.Opportunities to be social: Some HOAs organize social events like pool parties, barbecues and doggy playdates. In addition, because you see your neighbors in passing, you’re more likely than not to meet them in person. “Condos are a great place to meet people since you are close to your neighbors, and this can provide a great sense of community,” Leonard says.Amenities: Depending on the condo community, you may have access to top-notch amenities like a grilling area, business center, pool, dog park, covered parking, clubhouse and more, and the cost of enjoying these perks is shared among all residents.
ConsInvestment risk: “Condos can be a riskier investment because you are sharing ownership with other people in the building,” Leonard says. “If one person forecloses or short-sells their condo, it can take a toll on your value since you’re in the same complex.”Lack of privacy: Because condos share common areas like the lobby, hallways, outdoor patios and amenities, a condo might not be for you if you value your privacy, Ameralis says. The shared space also comes with noise issues. For example, if your upstairs neighbor wakes up early for work, those footsteps might drag you out of bed, too. If you want more seclusion or you entertain frequently, for example, a townhouse might be a better option.Limited outdoor space: Condos usually maximize real estate by building up, which often means there is limited outdoor or green space. “If you’re the kind of person who needs to park work vehicles at home or needs a lot of outdoor space for your work or pleasure, a condo may not be for you,” Leonard explains.Restrictive rental policies: When you buy into a shared building, you commit to following the rules, which can prohibit how many units can be rented at any given time. “Many condominiums don’t allow owners to rent their units after they purchase, so if you’re buying for an investment property make sure and check the rental regulations,” Leonard says.
Find other housing types:
|Apartment||Apartments are suited for anyone looking to stay in a prime location for a cheaper price near shopping, restaurant and entertainment centers, often at a more affordable cost than buying a condo or single-family home.|
|Condominium||Condos appeal to those looking for a lower-maintenance living, home with a sense of security, opportunities to be social with neighbors, among other factors.|
|Townhouse||Townhouses are a particularly good option or first-time homebuyers or other budget-minded home buyers who want more space than typically afforded in a condo.|
|Modular home||Modular homes are enticing to empty-nesters looking to downsize, couples looking for backyard units like tiny homes or families looking to upgrade their dated properties in nice but expensive neighborhoods.|
|Single-family home||Single-family homes are best for families who prefer a huge yard and plenty of room to spread out. Others still prefer a low-maintenance condo or townhome that includes benefits like landscaping, snow removal and exterior maintenance.|
|Multi-family home||Multi-family homes are best for those who are interested in getting into real estate investing and are comfortable with the added responsibility and time commitment that comes with being a landlord.|
|Bungalow home||At between 1,000 and 2,000 square feet, bungalows are a great option for young families looking for a starter home or retirees hoping to downsize in a home without stairs, or single homeowners who want the single-family home lifestyle without managing a huge property.|
|Co-op||Co-ops are most often found in major cities, and they can be good for those looking for security or neighbors who largely adhere to the building’s rules and policies.|
|Patio home||Typically capped at one-and-a-half stories and part of a larger association, patio homes are best for homeowners who don’t want to deal with stairs or maintenance.|
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|Ranch home||Ranch homes are ideal for anyone who prefers single-story living. Singles, couples and families with children can find something to love about a ranch home.|