Many buyers wish to purchase a condo because they see rents rising and realize that buying a condo is a smarter investment, particularly in the long run. For many people, it is more advantageous to own rather than rent property. Over time, the value of property appreciates, and equity in the property increases as monthly mortgage payments gradually reduce the principal amount of the mortgage. Renters, in contrast, pay a set monthly amount to the owner for use of the space. Instead of building their own equity in the rented property, they are helping the apartment building owner build equity.
A less technical way to think of a condo is an apartment that you own. In practice, condos often take the form of an apartment or similar shared complex, but theoretically, a condo could physically look like anything.
Investing vs. Renting
Condos are especially popular in places with high property values – vacation hotspots and urban settings. This is largely because buying a single-family home can be prohibitively expensive in places where additional building space may be scarce. As such, condos can open home ownership to whole new groups of people. Therefore, if you’re ready to own your own home, but can’t quite afford a house, a condominium could be a way for you to get into the market.
But on the other side of the coin, the renter remains worry free with regard to mortgage payments, maintenance costs, taxes, assessments, and fluctuating interest rates. The privilege of peacefully enjoying the rented premises at a set monthly rate may be more advantageous to some than tying themselves to often considerable and unpredictable financial obligations.
But it’s not just about the money. Owning a condo has other lifestyle benefits. While apartment complexes have transient residents frequently moving in and out, condo owners are more likely to invest in building a community. Apartments are managed by corporate entities or a landlord, while condo buildings are managed by the homeowners association. And if you’re a pet lover, consider that some rental properties have pet fees and breed restrictions. In a condo community, pets are family, too.
Condos also provide attractive lifestyle choices for many prospective buyers. They’re especially popular for retirees who want to be able to socialize or take advantage of services at communities that cater specifically to seniors. Living in a condominium can also free you from some of the usual chores that go along with owning a house, such as yard and exterior maintenance.
Searching for the Right Condo
Buying a condo involves the same process as shopping for a single-family home. If you have a general idea of what you’re interested in, going to a real estate agent can be a great way to find out about properties that you might not be able to find on your own. If you’re more of a do-it-yourself person, you can search real estate websites and listings for condos in the area you are interested in.
Before buying your condo, you should request and read the documents that apply to the management of the complex. What are the hot issues for this complex? How big is the condominium’s reserve fund? How does management deal with owners’ requests and complaints? Does the condominium impose strict rules and guidelines on owners that you would be unhappy with? You need to get a sense of whether the condominium you are considering is well run, whether the rules and restrictions would allow you to live the lifestyle you’re seeking and whether the building is experiencing any problems that could hurt the value of your share of ownership in the future.