Condos are popular for first-time home buyers as they are more affordable, less time-consuming, and less demanding in maintenance than single-family residences.
A condo is a single unit in complex or multiple units building. Generally, it is a residentially owned unit in a high-rise building. However, it can be smaller three-four units building or a freestanding house. The common spaces and amenities are shared and maintained by all the neighbors. Condos are similar in structure to an apartment, but apartments can be rented while Condos are single buildings owned. Thus the Property tax of the Condos is paid by the owner.
How does it differ from Buying a condo vs. buying a home?
Condos come with fewer responsibilities than a house. The Condo is far more affordable than a single house as in Condo, amenities and maintenance costs are shared by all the neighbors. Urban populations often prefer buying a condominium as they can use common areas, including parks, pools, playgrounds, gyms, dog-walking areas, and other public spaces at shared costs. At shared prices, condo living offers a lot of convenience and mechanical services like electricity, drainage, building repairs, etc.
Buying a home could increase the burden on your pocket for comfort and extra privacy. You have a yard and garden area to relax and party with friends. The house owner can change the house to suit personal needs and tastes. Contrary to this, Condo owners cannot remodel their homes and mow their garden grass!
Although Condo ownership has its advantages, such as less cost and more facilities, it has its drawbacks, such as unpleasant neighbors, a lack of privacy, no remodeling in the house, and heavy monthly maintenance.
Factor to consider for buying a Condominium
Before deciding which is the better fit for your scenario, it is critical to understand the difference between a house and a condominium. In one line, the Condo owner owns an interior space of the dwelling unit while a house owner possesses the land where the house is built! It’s up to you to make the best choice.
Following are a few crucial factors to take as a checklist before investing your hard-earned money the first time buying a home:
- Know your desired location and neighborhoods! Walk or drive a distance around; check the proximity to your office, schools, hospitals, shopping malls, etc, from your residence. Security concerns are a must to ensure about.
- The economy is a crucial aspect to consider for buying a house or a condo for the first time. The budget management for smooth monthly mortgage payments, including insurance, taxes, interest, etc., must be planned earlier. Condo owners must also pay property taxes, utilities, and maintenance. However, the taxes, insurance, and fees are shared by each unit holder, so the individual expenses go down. Insurance paid usually covers common areas and does not address respective unit owners’ losses.
- If you are buying a condominium for the first time, ensure you have enough reserve funds to pay for capital expenses, such as repairs fees, booking of the parking lot, and other expenses.
- Condo works for community assistance; it is different from an individual requirement. Community work is managed by the Condo association, which takes care of maintenance, communication, cleaning, security, and other duties. If general expenses such as an electrical issue, repair works, lift maintenance, or fencing of buildings come up, it has to be borne by every unit holder equally.
- Condo association charges monthly maintenance for the amenities that they provide. Consider what amenities the building offers so you can do a well-informed analysis before buying a Condo.
- Sometimes the Condo association has rules that you might have problems complying with. Such as having a pet or what kind of pet you can keep at home. Be sure to get every rule in knowledge and well documented so you know your limitations.
- Find out the total square units and size of each room so that you can easily fit the pieces of furniture. Area of storage space, outdoor space, or even parking spaces should be known before.
- Use a mortgage professional with condo experience to find the right financing for your purchase.
- Find a good real estate agent who understands the home-buying process, addresses your concerns, and gives you critical guidance. He will be well aware of the condo developments in your area, financial issues, or infrastructure problems around the room.
- Condo resale usually comes with lower prices compared to brand-new flats. You can have an established community also. Renovation and repair work can be daunting, though. It’s a good practice to compare all tangible factors before buying a Condo.
Condo Rules
Condominium Documents have a declaration of Covenants, Conditions, and Restrictions, and those who use or occupy a condominium unit are subject to the Act, as well as the principle, by-laws, rules, and regulations.
Condominium rules regulate the use of the premises, and the rules and regulations shall apply to all property owners, their residents, family members, tenants, occupants, agents, visitors, employees, and guests. The condo owners are fully responsible for the actions of their tenants, family members, guests, and pets and shall be held accountable for any damage done to the property.
Condos tend to have restrictions on residents, like pet restrictions. You might also be permitted to renovate your house without permission. Make sure you find out about these rules ahead of time.
Why do you prefer to buy a Condo?
Buying a Condo is a popular residential choice among young couples buying a house for the first time. They can embrace the joy of purchasing a condo at an affordable price.
In the future, you can sell it or put it in rent/lease and earn passive monthly income.
Condo association organizes auspicious occasions, festivities, new year parties, holiday celebrations, and many more fun things where you can build social networking and friends. You can access various amenities like a pool, gym area, dog park, landscape garden, covered parking, clubhouse, and grilling area-all in a single place.
You only have to pay homeowners association fees for upkeeping common areas and buildings. It comes with Homeowners Association Rules and Regulations that regulate many locations within the condo complex and take the burden off your shoulder by a shared expense.
Benefits
The condo property is a beneficial deal for the first time buying a home.
- Condon is more secure and has round-the-clock monitoring at the entrance.
- It also has cheaper insurance than a house because individual Condo makes up a tiny fraction of the total property.
- You can access luxury amenities like a gym and swimming pool which is too impractical for an individual house owner to own.
- You get a community and neighbors and can build good friends and neighbors in social gatherings and festivities. You can check with them about the going when you are out of your home.
- Condo living means less effort for maintenance. So if you are busy or unable to maintain your residential space, Condo is your best buying option. Care is usually consistent and predictable unless extra repair work or any social cause arises.
- Condos offer a wide variety of amenities and charge a hefty maintenance cost. You may think some amenities, like the swimming pool, are useless; you still pay for maintenance. However, these amenities increase the resale value of your property.
- Homeowners’ Association fees are worth paying to maintain the complex and its amenities. It takes your stress away from timely cleaning, security monitoring, or cutting grass.
Loan option to buy a Condominium:
Condos are individually owned units in the broader community building. More owners in a single condominium complex mean more risk involved, and the situation goes beyond the borrower’s control. A condo mortgage may have higher interest rates and require additional mortgage qualifications, so few financing companies don’t finance condominium complexes.
The Federal Housing Administration (FHA) and the U.S. Department of Housing and Urban Development (HUD) have a condo-approved list for FHA loans. If a condo complex doesn’t appear on the list, the borrower seeks a conventional mortgage with its rules and regulations.
Also Read: FHA Vs. Conventional Loans
Condo loans are a bit different than traditional mortgages; Lenders have more stringent qualification criteria for condos. It checks the building’s age and financial health, amenities, condition of the grounds, etc. Bank/lender may ask for additional documents of building’s insurance, HOA meeting notes and budgets, and information regarding the number of units purchased, any lawsuits involving the condo association, etc., to evaluate and determine the best loan option for you to buy a condominium.
Wrapping Up
Condos are often more affordable and comfortable than traditional single-family homes. Condos will be a good deal if you are a first-time home buyer.
