What is a condo? Everything you need to know about this housing type
Short for condominium, a condo is a type of home that has common areas that are shared among a community of owners. These shared amenities might include tennis courts, a laundry room, or a pool, as well as more basic things like the roof over the building and the landscaping surrounding it. While some condos are detached, in New York City many condos are part of a larger building or high-rise, similar to apartment buildings. Condo owners can do whatever they like with the inside of their unit, including things like painting the walls, remodeling the kitchen, or changing the layout of the unit.
Condo housing is fairly widespread around the world, especially in dense urban areas where space is at a premium. The first condos in the United States were built in 1960 in Salt Lake City, Utah. In 1961, federal legislation followed that allowed mortgages on condominiums, making financing easier to attain. Condos gained popularity first in South Florida, especially with retirees from northern cities, and soon became common throughout the country.
Table of contentsCondos vs. apartmentsBenefits of condo ownershipHomeowners’ associationsWeighing the pros and cons of condo ownership Finding the right fit
Condos vs. apartments
Condos are different from apartments in that apartments are owned by a landlord or property management company and rented to the resident, whereas condo owners actually own their individual unit. Apartment landlords typically own the entire building and the units inside it. Condo buildings sell each unit to an individual owner; that owner can either reside in the unit or rent it out.
Benefits of condo ownership
For people considering buying a home, condo ownership is an appealing option for two main reasons: sense of community, and price.
Community. Condo communities can offer a neighborly feel that counteracts the isolation of city living. Shared facilities such as gyms or pools offer a convenient place to socialize with neighbors. Unlike in apartment buildings where renters come and go, the ownership aspect of condo housing helps build a long-term sense of community.
Price. When it comes to price, buying a condo tends to cost less upfront than buying a single family home. The square footage may be smaller, and the listing price includes just what’s inside the unit. Upkeep and maintenance costs of the shared common spaces are spread out among all the condo owners. When expensive repairs are needed, such as upgrading the HVAC system or replacing the roof, these costs are also shared.
Each condo complex is governed by a homeowners’ association (HOA) made up of representatives from among the condo owners. Condo owners pay for their shared amenities through monthly fees to the HOA. These fees range from around two hundred dollars per month on the low end to upwards of $600, depending on the location and what the HOA fees include. Maintenance, utilities, insurance, security, and capital improvements all may be included in HOA fees, although property taxes are not commonly included. HOA fees are usually raised yearly or every few years to keep pace with inflation. Every association is slightly different, so when you’re considering buying a condo, be sure to consult with a real estate agent to understand exactly what your HOA fee will get you and what you can expect to pay for individually.
In addition to paying for shared costs, homeowners’ associations also set regulations meant to benefit the community. These rules typically cover things like the appearance of the outside of the unit, what kind of pets are allowed, and guidelines about leasing units to renters. Some HOAs are more strict than others, and it’s a good idea to make sure the rules of your potential condo complex are ones you can live by.
Weighing the pros and cons of condo ownership
The lower initial costs of a condo compared to a single-family home make a condo an attractive option for the first time homebuyer or older adults looking to downsize. Hassles like maintenance are taken care of by the HOA, which makes condo ownership ideal for busy people or those who aren’t handy. The luxury amenities offered by many condos, like pools or gyms, can be either a perk or an unnecessary expense, depending if you’ll use them. The main drawbacks of condo living can be the homeowners’ association, which restricts what you can do to your home, and the HOA fees, which you’ll pay monthly in perpetuity, even after your mortgage is paid off.
Finding the right fit
Condos, by definition, all share a similar ownership model, but the specifics of each condo complex can vary greatly. Living in a condo complex geared toward retirees may be ideal for older people, while those same owners might regret buying a unit in a building full of younger residents. People who prefer the space and privacy of a detached house may not be satisfied with sharing an apartment-style building with other condo owners, but may find a suitable tradeoff in a townhouse-style condo complex. If you want to buy but you’re not sure about the fit in a certain complex, you may consider renting a condo there to see if it suits your lifestyle first.
In big cities, condos can be quite expensive, and saving to buy one takes diligent personal budgeting. If saving for a condo is one of your goals, opting for an affordable rental while you save can help you get there. Bungalow offers private rooms in shared homes that are less expensive than living alone. Find a room for rent in a Bungalow home here.
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