If your dream place to live is a popular travel destination, a crowded urban area, or any other location where real estate prices are escalating, you may be intimidated by the costs of single-family homes. Buying a condo is one option that allows you to achieve home-ownership while staying within your price range.
What is a Condo?
A condominium, frequently shortened to condo, is a form of ownership in which some parts of a property are privately owned while others are owned collectively. For most condos, this means that a private indvidual owns an apartment or condo unit and also is a collective owner of the general property and amenities like a pool, gym, or laundry facility.
How to Find a Condo
If you are interested in buying a condo you can conduct your search in the same basic way that you would for a house. You can contact a real estate agent who can help you find a condo suited to your needs, or you can search on your own using real estate listings online and in newspapers. If there is a condo complex you know you are interested in, you can often contact the facility itself to learn more and schedule a viewing.
Condo Sales Contracts
One of the main differences between buying a single-family home and buying a condo is that you will have to sign an agreement with the condo complex in addition to the usual sales contract for a home purchase. This agreement outlines guidelines and regulations for the use and governance of a condo complex.
Be sure to read over the condo agreement carefully before signing. You will want to consider how the complex is run and governed, and what issues are of particular concern and relevance to you. You should be sure that there are no guidelines or regulations you will be unhappy with and that disputes or complaints will be handled fairly. You want to be sure that the condo complex is well-run both for your satisfaction living there and to ensure that your unit will maintain its value in the future.
While financing for a condo is very similar to financing any other property purchase, there are a couple of hidden costs with condos. Owners of condos usually have to pay condo association fees that are used for upkeep and maintenance of the common property. You may have heard that buying a condo is expensive because of these fees, but actually the costs can vary widely, so it is important to find out the details. Also, as home owners, condo owners do have to pay property taxes. And as always, you want to find the best mortgage so you can save money over the long run.
Why a Condo?
When asking yourself “Should I buy a condo?” there are a number of factors to consider. Condo prices tend to be lower than comparably-sized single-family homes, and condo regulations often maintain high property values, ensuring your purchase is a solid investment. Also, buying a condo rather than renting an apartment or condo offers the benefits of tax deductions for home-ownership.
One of the added benefits of living in condos is the increased socialization offered by living in closer quarters with others. Some condo complexes also come with attractive amenities such as swimming pools, fitness centers and on-site laundry facilities that may make the association fees well worth it.
Buying a condo is also a more reasonable, affordable option for those wanting to purchase a vacation home in a popular destination. Sometimes there are even condo associations in these destinations that function similarly to hotels, allowing owners to visit frequently but rent their condo out short term for extra income.
While single-family homes may be the first thing that comes to mind when considering home-ownership, condos deserve to be considered as a more affordable option with added amenities. In areas where real estate is very expensive, buying a first condo may be the best fit for new homebuyers. Sure, they aren’t for everyone, but a condo may be right for you.
Author: Jon the Saver
All solid advice. I would also add that as you embark on this you research real estate agents in the area to help make the deal go smoothly. Condo fees, local taxes and other slippery issues get covered this way. But, as I said, research the local agents and interview them before signing on with them. It's important to feel at ease with the relationship.
Condos are often overlooked by families, perhaps seen as something more for singles or young couples-- so thank you for this post; for sharing this great knowledge. Condos are a great first homes, as they are almost a combination of an apartment and a home. I mean, you get the social environment and maintenance of an apartment complex, but you get more freedom (to paint, redesign, etc.) and the privacy of owning a home. Condos are also easier to rent out, should you need to sublet. The big question is whether or not you should be renting or buying. I work for Mango Money's blog and we've recently done a post on just that. Check it out before making any big decisions, it really might help! http://blog.mangomoney.com/money/to-rent-or-to-buy-8-questions-you-should-ask-yourself
Great post! I really like the model of condo home ownership. Also, for myself and I am sure many others, condos typically come with yard maintenance and home maintenance included in the homeowner dues. These are tasks that are often neglected and lead to much higher damage down the road, so having these fees covered in your monthly bill, lets you stay on top of your expenses, as well as avoid having to arrange repairs and maintenance yourself.