When choosing a place to live, you will be able to decide between living in an apartment, house, condominium, or another similar option. Condos can be great steppingstones to an eventual house purchase, as well as a great place to lay down roots and start building a family. Let’s dive into this home option as well as why it can be an excellent investment decision.
What is a Condo?
A condominium, also called a condo, is a type of housing that exists within a residential complex. Each condo is its own unit owned by an individual, but you typically share walls with your neighbors. A condo can range from being multi-floored to just being a single unit inside of a high-rise building.
Buying a Condo vs. Renting a Condo: What’s the Difference?
When choosing to live in a condo, you will have the option of buying or renting. Buying means, you own the condo directly and you will be responsible for making monthly mortgage payments. When you rent a condo, you pay a monthly cost to the landlord of that condo. That could be the person who owns it, or it could be the condo association that owns the building.
When renting, condos typically have a one-year long lease that can be renewed at the end of its term. The average cost to purchase a condo has risen by $50,000 over the course of recent years, making the decision to buy more difficult. Determining if a condo is right for you as well as looking at the benefits to buying, rather than renting, can help ensure your satisfaction with your next home.
How to Know if a Condo is Right for You
As you start the search for your new home, there are a number of factors to keep in mind that could indicate whether a condo is the best choice. Most notably:
- Consider whether or not you want an outdoor space such as a yard or porch
- Decide if having amenities available to you, such as a gym or courtyard, is important
- Determine if you want a condo association regulating your community
- Look at the current budget you’re working with
- Think about how long you will actually be living in the area
All of the above can help you to determine if living in a community style complex with condominiums that contains shared amenities and a managing board is right for you.
10 Benefits to Purchasing a Condo
When considering whether purchasing condos is right for you, there’s a number of benefits to keep in mind that could sway your decision. Below are 10 of the most pertinent pros to owning your own condo:
Cheaper homeowners’ insurance
When you purchase homeowners’ insurance for a condo, you only need insurance that covers the interior of your condo and the exterior walling. The condominium association that your building is a part of is responsible for handling anything that happens to the common areas of the building, including walkways or amenities. This is why affordable beachfront condos in New Smyrna Beach and other coveted locations come at a lower cost.
Overwhelmingly positive sense of community
Many people enjoy owning a condo due to the sense of community that living in such a complex brings. While sharing a wall with neighbors can have its downsides, getting to know your close neighbors is important to many people with extroverted tendencies.
Great proximity to restaurants and shops
The majority of condos will be constructed in close proximity to restaurants or shops in the area, as opposed to neighborhoods with houses that can be far from city centers. This can be an enticing factor when considering a condo purchase.
Appliances are all included
One major downside of purchasing a home is the fact that not all appliances are included. Some homes will come without washing machines, drying machines, a fridge, and even a dishwasher in some cases. In a condo, however, all appliances are included for the most part which can save a large amount of money during the move.
Security and other community amenities
A primary benefit to living in a condominium community is that most have 24-hour security that constantly patrols and keeps things in order. For young people or those with families, this added protection can be a massive benefit.
Maintenance is often covered
For a large number of condominium associations, maintenance services are provided free of charge or at a reduced cost. Rather than trying to solve a major maintenance issue yourself or hiring a professional worker, you can trust your building association to handle the issue.
You can build equity over time
Every payment you make on the mortgage for your condo is more equity that is being built in your purchase. Equity is simply the dollar value you actually own in your home. For a $500,000 condo with $200,000 paid off, the latter value would be your equity.
Condos are far more affordable than homes
While rates for condo loans can be higher than those of a traditional mortgage, typically 0.125% to 0.25% higher, the lower principal results in a more affordable purchase. Condo loans can still take 15-30 years to pay off, but the monthly payments should be far lower than that of a home mortgage.
You own the unit which allows greater freedom than apartments
While you don’t own an apartment and, therefore, can’t make changes to the unit, you do actually own the inside of the condo. This means that you can make whatever change you wish to the interior without checking in with the condominium association.
Your condo may appreciate in value over time
Depending on the property and location, your condo may appreciate in value over time which will allow you to sell for a higher cost in the future. Even if you don’t plan to resell currently, having the possibility is an excellent caveat.
Learn how your condo can be an investment
Choosing what type of home you want to purchase is never an easy decision, but a condo can be the right choice for a number of people. Consider how long you plan to live in the area, along with what type of amenities you’re looking for, before making a final decision. Either way, buying offers many benefits over renting and can be the strategic option for anybody looking to find a place to live.
