Home Buying 101 – Buying a Condo

Owning a Condo

(Photo from allaboutgeorge, Flickr.com)

Homeownership certainly has a number of benefits, from the tax advantages to the equity you’ll build in your property. However, the maintenance and upkeep that a traditional single family home requires isn’t for everyone. If you aren’t ready to spend weekends on yard work or home repairs, why not consider buying a condo?

The advantages of owning a condo

As a condo owner, your liability is limited to the interior of your unit – the structure of your building and all exterior spaces are owned communally by the home owners’ association (HOA). What this means for you is that the cost of major repairs – like a new roof or new siding – are shared by all the members of the association, instead of falling squarely on your shoulders. While you’ll still be required to pay for interior improvements and repairs, your overall costs will be much lower than with a standalone home.

But lower repair bills aren’t the only advantage to condo ownership. In addition, your complex may offer community facilities – like a pool, gym or clubhouse – onsite for you to use, free of charge. Your monthly bills may also be lower than single family homes, as shared condo walls cut down on heat and cooling expenses. Finally, condo complexes offer a sense of community you won’t find in your own home – if you’re ever feeling lonely, your neighbors and friends are just a wall away.

What you need to be aware of with condo ownership

Of course, there are some downsides to condo ownership. Let’s take a look at a few of them:

1. HOA Fees

Although you aren’t responsible for many traditional homeowner tasks, you aren’t off the hook altogether. Every month, you’ll be required to pay a home owner association fee which goes towards the maintenance of common areas, on top of your mortgage and tax payments. The size of the fee depends on the association and the level of service it provides, but in most cases, you can expect to pay between $100-400 per month to the HOA.

2. Rules and Covenants

When you buy a condo, you agree to abide by the rules and covenants set forth by the HOA. These may include such things as how you’re allowed to decorate your home, how much noise you can make and whether or not you can rent out your condo in the future. Breaking these rules can result in penalties or fines, and a strict HOA board can make your life miserable if you aren’t prepared to abide by them. Basically, if you need the freedom to choose your own paint scheme, think long and hard about buying a condo.

3. Future Resale Values

Traditionally, condos appreciate less in value than single family homes and often take longer on the market to sell. This isn’t always the case – condos in desirable neighborhoods can turn over quite quickly – but you should be prepared to wait a little longer than normal when it comes time to sell. If potential resale values are a concern for you, you’ll want to do your homework to determine whether a condo or a single family home makes more sense for you.

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