First, letâ€™s talk about what exactly a condo is. Basically, a condo is different from a house in that you actually have a shared ownership with other people. Most people believe you own one unit in a condominium building. Actually, you own only the walls of the condo and the air space in between. And sometimes you donâ€™t even own the walls, just the airspace. However, in addition, you own a share of all the common areas and elements of that building, such as the hallways and the laundry room, the garages, the swimming pool, and the lobby.
- Affordabilityâ€”Condos are generally more affordable and lower in price than single-family homes. In most metropolitan cities especially, housing prices are so expensive that condos are the starter home option for many people. And after the severe market downturn, condo prices dropped even more than home prices. Thus condos are more affordable now than ever.
- The only game in some townsâ€”In New York City, condos and co-ops are pretty much the only game in town, unless of course you have the superbig bucks to buy an entire town house. And in metro Chicago, condos are one of the residential mainstays.
- Access to better neighborhoodsâ€”Condos allow homebuyers to move into better neighborhoods in more desirable parts of town. Often theyâ€™re in central city locations, near public transportation, good schools, stores, restaurants, nightlife, fitness centers, and job opportunities. Developers are able to offer condos even in the best of neighborhoods for a lower price because it costs less when you put more units in a building on one piece of land.
- Extra amenitiesâ€”Condos may offer lots of great amenities like pools, gyms, entertainment or conference centers, and tennis courts that you donâ€™t personally have to worry about keeping clean or maintaining. Sure, you have to write that condo association check every month, but you donâ€™t have to be cleaning out rain gutters in the spring or raking leaves in the fall.
- Safetyâ€”Condo buildings have a certain safety factor. They usually have security gates and entry system intercoms. And of course there is safety in numbers. Having neighbors close by and across the hall is a big deterrent to crime, and a comfort as well, especially for single buyers.
- Ability to turn the key and walk awayâ€”You often hear people say that they just want a home that is easy to maintain and manage. Condos provide that. For people who travel or spend long hours away from home, condos are ideal. Lock the door and go.
- First to go and the last to come backâ€”When the housing market falls, condos tend to decrease in value faster than single-family homes and take longer to come back when the market begins to rise again. In the recent real estate dip, developers flooded the market with an oversupply of condos in growth cities like Miami, San Diego, and Las Vegas. The excess inventory coupled with the subprime mortgage crisis drove condos down in price much faster than their single-family-home counterparts. Condos are always in unlimited supply, whereas single-family homes have limited supplies. You can only build one house on a single lot, but you can have twenty condos on the same piece of property.
- Association duesâ€”With condos you share some common areas as well as the cost of maintaining those common areas. As part owner of the building, you will have to be responsible for a portion of the swimming pool repair or the new roof or the new tiling that goes into the lobby or even the elevator that has to be replaced down the line. This is all part of your monthly maintenance fees and later on possible unpredictable assessments that may come up this year, next year, or in the future.
- Common wallsâ€”Keep the noise down, folks. If you can hear your neighbors yelling, they can probably hear you playing your favorite pop hits on your iPod docking station. Thatâ€™s the price of sharing common walls.
- Condo board rulesâ€”You have to play by the rules. You are now part of a group of owners and have to adhere to the condo associationâ€™s rules. I have a friend who was charged $500 by her association as security when she had to move furniture. The fee was supposed to cover any damage the building sustained when she moved a new couch into her unit. Totally unnecessary, but she had to adhere to her building associationâ€™s rules.
- An apartment feelingâ€”Most condos donâ€™t have the private outdoor space that homes do. Yes, you might occasionally do some grilling on your balcony, but your neighbor in the balcony above you isnâ€™t going to like it.
When condo shopping
, itâ€™s so important to understand that you are not just buying a condo unit, you are really buying a part of a building. And you want to make sure that it is a healthy building. Iâ€™m talking about financial health. If the financial profile seems shaky, or if additional assessments for big-ticket items like new elevators or windows or a large-scale lobby renovation are needed, no matter how great a deal you think you may be getting on the price, youâ€™ll still have to be kicking in extra money in the form of assessments to bear the cost of the buildingâ€™s ailing finances.