Condominiums, “condos” for short, are an attractive option for many prospective homeowners compared to a traditional detached home.
With about 55% of the world’s population living in cities, condos are becoming increasingly popular and high-density residential development projects are sprouting everywhere because of it.
With that being said—are condos for you?
While it ultimately comes down to personal preference, we can always come up with pros and cons.
Pros of Condos
Condos are Typically Less Expensive Than Traditional Homes
In 2019, the NAR reported that the median sales price of condominiums in the United States was $249,600. A significant reduction from a median price of $274,500 for single-family detached homes.
Of course, all markets vary. But, generally, you’ll see lower sale prices for condos. In turn, equaling smaller monthly payments for a mortgage and property taxes.
Condos are Managed by an HOA.
The primary reasons for the existence of condos are to fit a large number of people in a small area and to provide the most convenience possible.
The latter is made possible by a homeowner’s association (HOA), or, in other words, the managing body of a condominium complex.
HOAs own and maintain the exterior of a complex. While the homeowners are responsible for interior maintenance. The exterior walls, amenities, as well as any additions, will be maintained and managed by an HOA.
Condo owners enjoy the luxury of not having to deal with all the nuances of upkeeping a home.
Lots of Amenities
Condos come with amenities, such as playgrounds, pools, fitness centers, business centers, clubhouses, and more.
While these features may seem free at first, someone has to pay for them.
The upkeep and addition of amenities will ultimately come out of your pocket and paid to the HOA. But it’s worth it when you consider the savings you’ll have on a gym membership, club membership, and other fees you’d normally pick up anyways.
Amenities vary from complex to complex. It’s important to do your research to see what makes the most sense for your lifestyle.
Due to the nature of a condominium, there’s a lot of people in a small amount of space. We call this “high-density real estate”.
High-density living often brings an air of sociability between neighbors. Unlike detached homes, neighbors are literally a couple of feet away.
Since condominiums or any type of home is purchased based on your interests and lifestyle, you’ll often find many people of the like mind in your complex, bringing camaraderie and easy ice-breaking conversations.
Condos are usually central to a popular location, such as the downtown district of a city or areas of high employment.
This makes condos a great option for those looking to cut their commute times drastically.
This also provides for great nightlife, as you’ll be within walking distance or a cheap Uber fare from the most popular restaurants, movie theaters, social clubs, and more.
Sense of Security
Condos typically employ security staff, especially for larger complexes. On top of that, the more people around, the more secure an area is.
This makes condos attractive for retirees and for those who work odd hours and don’t come home until late at night.
The space that you buy is the space that you’ll always have. There’s no room for expansion with condos, literally.
Anything you do try to add or change to your space would have to be approved by the HOA.
If you’re the DIY type of person or someone who’s constantly building and making additions to your home, then a condo may not be the best fit for you.
When you purchase a condo, you’re buying into a larger project. You’re investing in a fraction of the whole condominium complex.
This means you’re also at risk of losing equity value or your entire investment due to forces you cannot control, such as other people messing things up.
If there’s a fire at your complex and the whole thing comes down in flames (no one is hurt, thankfully) then you’ve lost your whole investment due to someone else’s grease fire.
Other ways of losing value can include foreclosure on another unit, which may get sold for a discount, thus dropping yours and everyone else’s property value.
Many HOAs also restrict the ability to rent out your condo, so you wouldn’t have the same leverage to create wealth as you would with a detached home.
At the Mercy of an HOA
HOAs can easily hike rates because of maintenance costs and added amenities. It’s important to keep your budget in mind when buying a condo and anticipate increases in future payments.
HOAs can also leverage special assessments, which are extra costs created to pay for unexpected expenses or to pay off debt for new amenities.
Lack of Privacy
Unfortunately, your connected walls, shared hallways, and common lobby provide little privacy. If you’re not into your conversations being overheard or you entertain a lot, condos may not be the best fit for you.
Some condos have notoriously thin walls. When you’re previewing condos you may purchase, ask your potential neighbors how they feel about the walls and general sense of privacy. This can be as easy as speaking to someone in the lobby or knocking on a door.
Some condos are huge. Some are tiny with little storage space.
On top of that, you may have to deal with parking problems since a lot of complexes don’t assign parking.
Between limited closet space, smaller square footage, and long-distance parking, evaluate your true reasons for wanting a condo before purchasing one.
Personally, I love condos, and I especially like to sell them.
But, I’m also of the younger demographic, work in a city, and love to be social. It makes more sense for me.
At the end of the day, there are some great options and all complexes offer different spaces, amenities, styles, and locations.
There’s really no “one size fits all”, just like normal detached homes.
If you have any questions about condominiums, please feel free to leave a comment below.