Home Buying 101 – Buying a Condo

Buying a Condo

Homeownership certainly has a number of benefits, from the tax advantages to the equity you'll build in your property. That said, traditional family homes require maintenance that not everyone is prepared to cope with. 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). This means that costs of repairs - like a new roof or siding - are shared by members of the association, instead of completely on you. 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.

Lower repair bills aren’t the only advantage. Your complex also might offer community facilities such as pools, gyms, or clubhouses onsite that you may use, possibly for free. Bills for heating and cooling may be lower than single family homes, as shared condo walls are more energy efficient. 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. Fees for HOAs

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 fee itself depends on the size of the association, and services they offer, but most often, monthly dues are in $ 100 to $ 400 range.

2. Rules and Regulations

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. Resale Values

Traditionally, condos appreciate less in value than single family homes and often take longer on the market to sell. It isn’t always the case, as condos in popular neighborhoods sell quickly, but be prepared to wait a while before the sale can close. 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.