Condos: Pros And Cons For First Time Buyers
An empty nest and other lifestyle changes are propelling many people over a certain age to consider condominiums as an alternative to owning a single-family home. Furnishing and maintenance are hassles that are also driving many younger people to opt for condos. We’ve reviewed the potential benefits and drawbacks of condo living to help you decide if buying a condo is right for you, regardless of your age or where you are in life.
Owning a house comes with a host of responsibilities that can make condos an easier transition for people first dipping their toes into the housing market. “If you are not handy and don’t like managing people to get things done, a home can be a challenge,” says Sep Niakan, Miami real estate broker. Mowing the lawn, cleaning out the gutters and shoveling snow are chores that many people would much rather pay someone else to do. An aversion to home maintenance has driven many people to invest in condos in place of single-family homes. “The reason why millennials like condos versus buying a single-family residence or buying in a neighborhood is the maintenance,” says Charles Kniffen. “The maintenance is just a ton less,” he says.
People looking to make the most of retirement are also often drawn to the maintenance-free living that a condo offers. “They are looking to do more outside their homes, to enjoy downtown and waterfront activities. They don’t want to be gardening and working on the lawns on the weekend,” says Alexei Barrionuevo.
Pack Up and Go
For young people on the move, condos are an excellent home option. “Millennials may lean toward a condo because they might travel for work or leisure a lot, and being able to lock up your unit door and know everything else is being taken care of and secure is a comfort to them,” suggests Niakan. Having the exterior of your home managed by the condo staff cuts residents’ ties with a regular maintenance schedule, allowing them to come and go more freely without worrying about the security and upkeep of their home.
For those approaching retirement, condos allow for increased flexibility in scheduling family vacations and other leisure time. “For those snow-birds that live in the east in the summer and the south in the winter, condo living is perfect,” says Denise Supplee.
Small Scale Luxury
According to Gail MarksJarvis of The Chicago Tribune, people who have retired or are nearing retirement are often attracted to the luxury condo market. As they tour new condos purchased by their children, they are sold themselves on the open layouts, elevated views and vibrancy of many condo communities. “One floor living can be appealing, organized events, and again, perks like a fitness center or swimming can be advantageous to the older home buyer,” Supplee says.
Access to Transit
Another factor motivating people, particularly young people, to move into condos is easy access to public transit. Whether they’re concerned with saving money or with decreasing their carbon footprint, many people closely consider transit access when deciding on the location of condos in both urban and suburban areas, suggests Mark Savel, a sales representative with Sage Real Estate in Toronto.
Lower Price Tag and Insurance
“Because of the lower price tag, it may be easier to qualify for a condominium,” Supplee says. This is a great benefit for anyone who might have a tighter budget to work with. Additionally, insurance rates are lower for condos, as residents are only responsible for insuring the inside of their homes. The outside of condos, including roofing, driveways and common buildings, are all insured through the condominium, and maintenance and repairs are covered through the homeowners association fees.
Fully furnished condominiums appeal to many people who may be making the transition to living in a smaller space. For those with busy schedules, move-in ready condos eliminate the often time-consuming search for furniture. And for those looking to avoid the hassle of moving bulky couches and tables, furnished condos could also be appealing.
“In many condo complexes, there’s a certain community that builds up. It might be people under 30 or younger families with kids,” Kniffen says. “There are also senior living communities. You can kind of find your fit,” he adds. You can typically guess at the makeup of the community based on the layout of the housing. For example, four-bedroom houses generally attract families. Thus, those living in condo communities are frequently connected by similarities in age and lifestyle.
Condominium projects are also built to appropriate code as specified in the Americans with Disabilities Act to accommodate those with disabilities. “Sometimes you buy a house and maybe you have a friend that’s in a wheelchair, that person may not have access to your house,” Kniffen says. “You know when you buy a condo, they’re going to have access to it because it is built to code and those codes are kept up.”
Unlike people who are buying for the first time, people making the transition from owning a single-family home have to adjust to abiding by the homeowners association (HOA) regulations. The loss in autonomy that comes from condo living could be a potential roadblock for those accustomed to the freedom of managing their own house on their own terms.
“You may not like some of the stuff the condo association tells you to do. They may decide that they want all fuchsia doors and that’s what’s going to happen because it’s a condo,” says Kniffen. “They can dictate that kind of stuff.” In addition, the interior of the condo could be subject to certain standards because condo owners desire similar layouts. The potential design limitations of condos could put a damper on your ability to express your individual style.
Although you’ll be paying less insurance with a condo, there are the HOA fees to consider. HOA fees are monthly dues that usually cover maintenance, lawn care, and other services and repairs. Covered services vary, so make sure you know what’s included in your condo’s HOA costs. Fees can range from a couple hundred dollars up to a thousand dollars a month and can be raised at regular intervals.
Make sure the condo’s HOA budget is in order. If it isn’t, the association dues might not cover emergency maintenance, and you could be stuck with a higher bill down the line. Quicken Loans requires that 10% of the HOA budget go toward emergency savings when you’re applying for a mortgage on a condo.
Condos can be more difficult to sell as a result of certain HOA regulations. “If your association’s not doing the right thing, then you could be very limited on who you can sell your property to or who will buy your property. It can affect the type of loans that you qualify for along with your potential buyer,” Kniffen says. Also, high HOA fees could be a potential deterrent to future buyers, making your condo more difficult to sell.
Are you looking to buy a condo? Before you start hunting for the right one, review our list of the top 10 things to avoid when buying a condo.
· Lydia Koehn