Another question - Condo and townhomes vs. house.

Asked by Jane Seymour, Tempe, AZ Mon Apr 12, 2010

I've never owned a house before and was sure I was going the condo or townhome route until I started looking around and fell in love with a few homes in Tempe and South Scottsdale. What are the pros and cons of each? I'm used to renting apartments and having yardwork, etc..taken care of. However, if I buy a condo, are HOAs written in stone? Can they go up anytime and at any rate? I do like to travel a lot so please keep that in mind.

As for buying an actual house, one thing I fear is a ridiculously high water and electric bill. I already pay for it where I rent but I'm worried that if I buy a house instead of a condo it will cost even more to keep cool in the summer. I would love to hear your thoughts. Thanks.

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Suz A, Agent, Longmont, CO
Sun Jun 5, 2011
||||||| UPDATE: June 5, 2011

You'll find sometimes wide differences between the two when comparing home vs. townhome, particularly when it comes to HOA fees. Homeowners purchase their own insurance for the structure. But, if you share a roof with several other owners, it doesn't make sense for all of you to pay on separate policies to cover the same roof. That's why some associations charge more for dues than many associations for homeowners. Homes and condos can have the same amenities. There is a good deal of variety, so you might have to take extensive notes while shopping.

These days the more important question might be whether the HOA is sound financially. You can request information from the HOA to help assist you in making your decision. You can ask, too, how often fees have been raised. You might find, too, that newer neighborhoods that have had a lot of foreclosures have HOAs that have struggled.

If you're absent from home a good deal, a condo with fewer maintenance chores may make sense. Consider, however, this is a minor issue. Many homeowners have friends look after their homes or pay a neighbor to care for a pet and a few favorite plants while they are away. A third option is to offer a live-in, rent-free arrangement with someone who will look after things for a few months.

Hope that is helpful for you and all the additional eyes that will see this post.

PML of Longmont
1 vote
Joan Braunsc…, , Morris County, NJ
Mon Apr 12, 2010
Condo/townhomes often are harder to sell than a single family home and for investment purposes, may not be the way to go. Think about it- when you are selling a condo, you are competing with possibly many other units virtually the same and the price competition tends to be fierce
However, if you travel a lot and enjoy having someone else do the yardwork, the lack of hassle of maintaining the yard, etc may be worth the HOA fee and the ease of living.
If you have the same size house as condo, there would be no reason why it should cost more to upkeep. The same square footage should cost the same to cool.
And reading back on what I wrote, I'm not sure I did anything but confuse the issue even more for you.
I think when it comes down to it, this is obviously something only you can answer.
Its a good start, educating yourself as much as possible. Take your time and I happen to be one of those people that feel that as long as you go into the process as knowledgeable and prepared as possible, you will know when you find the right place for you.
1 vote
Gary Chen, A…, Agent, Chandler, AZ
Fri Jan 7, 2011
Here are some of my points...

- Owning a condo is like you are your own landlord. You pay mortgage rather than rent. Mortgage interest can be tax deductable, a huge financial factor to consider.

- Living in condo is just like living in a rented apartment except there is no leasing offce and your neighbors are much stable comparing to renters in apartment complex that they come and go.

- No leasing office does not mean there is no one maintaining the condo complex. The HOA will and the chances are they do a very good job in public area maintenance, pool, spa, fitness center, club house, side walk, green belt, dumpster area, hallway lights, exterior and roof of the condo buildings, gate maintenance, if applicable, and so on.

- Monthly HOA dues include blanket insurance for the condo structure, water, sewer, trash and pretty much all maintenance mentioned above.

- So, for an apartment renter upgrading to a condo owner, the path is very smooth and compatible and can be easily put as you pay less and you own it.

- It is particularly good for people like you who travel a lot. So, you do not need to worry about the maintenance. The HOA will also oversee the compliance of CC&R which is the rules and regulations of the condo complex. Simply put someone will take care of the property while you are away.

To compare the difference between renting an apartment vs owning a single family home, it is not that straight forward and the key thing is what is the purpose of buying a house. Investment, raise a family, better privacy, need more living space, need back yard, need garage, tax shelter,... Each different purpose may have its own comparison result. If you can be more specific, i'd love to share my views with you further.

You've take the first step in owning a piece of real estate. It's a very good move and Good Luck!
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0 votes
Judy Hudek, Agent, Scottsdale, AZ
Mon Apr 26, 2010
Jane - good questions.
Seems most people are always a little nervous when they make the "jump" from condo, or renting, to owning an actual home.

As a renter it is always easy to pick up the phone and tell the landlord that your sink is backed up, or the dishwasher isn't working. As an owner (condo or home) that responsibility falls to you! A home warranty can be obtained in most purchases and can help protect you from large unexpected costs. It is also smart to start a little emergency fund just for these items.

Xeriscape is the newest thing - easy on the water and easy to maintain. Many of the city utility companies offer free courses. Check out the Desert Botanical Gardens as a reference as well.

You can ask the seller for copies of their utility bills so you know what to expect. Pools will also increase both water and electric use.
For HOA information you should always read the HOA documents during the inspection period. This will let you know what the rules are and what you can expect from then.
Sincy you enjoy traveling it would be good to know your matter what type of home you buy.

Good luck!
0 votes
Suz A, Agent, Longmont, CO
Mon Apr 12, 2010
Remember this word: xeriscape. Tempe and South Scottsdale are perfect for xeriscaping, and you can have distinctive, easy to maintain landscapes by first hiring a landscape designer/architect or taking free courses that you can find on the Internet. You might want to introduce yourself to residents in neighborhoods you like and ask about things like costs. Ask someone who has a listing there to share this information. You can even ask to look at some copies of utility bills. It's not unusual.

You might not like HOAs if your first question is are the HOAs written in stone. One reason for having HOAs is to share expense of having common areas, parks and swimming that need to be maintained. The second reason is to enforce rules about unattractive and home value killing practices some people bring from non-HOA neighborhoods and condominiums. You begin to appreciate a good HOA when someone has parked a car on blocks on their driveway and spilled oil.

Newer communities have HOAs. In Longmont where I live, HOAs also have committees that approve designs, paint colors, fence painting and other modifications. Many have websites and they post their guidelines.

HOA protected communities are worth the extra steps when you consider these neighborhoods sell well. In these times, it doesn't seem too terrible to have an HOA dropping reminders in the mail about putting away garbage containers when it's time to sell.

Hope this helps.
0 votes
Anna M Brocco, Agent, Williston Park, NY
Mon Apr 12, 2010
Condo owners own the inside of their units and a percentage of exterior surfaces and land based upon the units’ ratios to the realty. Townhouse owners own the complete unit including the exterior surfaces and the land on which the unit is built and a house is a house . You decide--HOA rules and regulations are to be followed and sometimes subject to change and voted on usually at a general meeting; the fees can go up depending on it's budget, common area repairs, etc.
0 votes
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