The Pros and Cons of Buying a Condo
As a very recent, very first-time buyer, I know the lure of condos. They’re just less intimidating than single-family homes. With a condo, the property is shared. The Home Owners Association (better known as HOA), which we will become a part of once we own said condo, becomes like a protective family. Together with the rest of the owners of a property, we conquer big headache issues like roof replacement, upgrading electrical systems, security, landscaping and pest control. As renters, we didn’t deal with these issues much: our landlords usually did, and that includes paying for them. To the fledgling homeowner, the idea of sole responsibility for home and yard maintenance, along with that of a mortgage, can be overwhelming.
But we need to know that though condo management is indeed a shared process, that process doesn't always mean condo-living is complication free. The most complex part is also that that part that protects you: Your HOA.
HOAs and Fees
HOA stands for Home Owners Association. As part of the HOA, you pay HOA dues/fees. They should be basically stable payments, though occasionally a larger payment may be required if the HOA does not set aside enough money in reserve to cover something major, like replacing all the roofs at once.
In one sense, these dues can be comforting, because they seem to take care of some many things a new homeowner may still be trying to understand. Common items covered by HOA fees are utility payments, insurance, and exterior maintenance. Some HOAs fees may also include cable, wireless, and security. Clearly, what’s covered and the actual amount you will pay monthly to your HOA varies from one property to the next. You and your lender must factor in the dues when deciding how big of a mortgage you can afford.
Unlike mortgage interest, HOA dues aren't tax-deductible. Also, in most cases, HOA fees won’t stretch to cover personal property—as in whatever’s inside your unit. That means additional insurance for your unit and perhaps something to help cover the deductible (if there is one and it’s expensive) on the HOA’s shared policy that protects the property as a whole.
Essentially, your HOA is a mini-government that votes in a list of CC & Rs: Covenants, Conditions & Restrictions. These rules can be either liberating or oppressive, depending on whether you personally agree with them or not. For instance, some condo buildings in America these days are entirely smoke free. No smoking in your own unit nor anywhere outside of it. Other common rules restrict what kind of decorations you can hang outside your unit (holiday lights, flags, etc.) and how long you can leave them out.
The best way to ensure you agree with the CC & Rs is to join the governing board itself. But just as in any democracy, this won’t guarantee total control: decisions generally go to majority vote; you may be very much opposed but they could still pass. For instance, your HOA could vote for rental restrictions (if you’re thinking of renting the condo at some point, this should concern you). Your HOA may vote against a certain breed of dog (perhaps yours!) or instate certain quiet hours that make you feel like you’re a tenant again.
Know Your Neighbors
If I’ve told you to spend some time in a neighborhood you’re thinking of buying into, and to talk to your potential neighbors, I’ll double the advice in a condo situation. Condo complexes are tight-knit little neighborhoods all their own. Get to know the people in a complex a little before you buy, possibly by attending an HOA meeting. And when you get your disclosures from the seller, even though you’ll get several dozen pages, read every word of the current CC & Rs.
Condos can indeed be easier than single-family homes, and are typically smaller as well, so perhaps less expensive and troublesome to maintain over all. They also guarantee a community: those people you share the property with will become like family to you, sharing common interest in the property’s up-keep.
The upshot: Condos can be great first homes, easier in so many ways for first-time buyers. Or condos can be great downsizing options, for people looking to shed the responsibility of maintaining every square foot of a home and its surrounding property. Just study the options well, choose wisely, and find the home that’s right for you.
- Find a Real Estate Agent who can help you choose between a condo and a SFH
- Search for homes and condos on the MLS now on ZipRealty’s home search. Simply pick a region, then limit your search to either condo or single-family home, or peruse listings in both categories.
Anna Marie Erwert writes from both the renter and new buyer perspective, having (finally) achieved both statuses. She focuses on national real estate trends, specializing in the San Francisco Bay Area and Pacific Northwest. Follow Anna on Twitter: @AnnaMarieErwert