Should I Buy a Condo or a House?

There’s a lot to consider when you buy a home. For many people, those considerations start with a simple question: Should I Buy a Condo or a House?

What is a Condo?

First, if you don’t know what the word “condominium” means, don’t worry – you’re not alone! I get asked that a lot, especially by first-time home buyers. The word “condominium” is a fancy Latin word for “shared home.” You share responsibility for your home’s maintenance and upkeep with your condo board. In most condos, you own and are responsible for everything inside the dwelling, but the condo association is responsible for everything outside the house.

For example, if your hot water heater goes bust, you would be responsible for repairing it. But if your roof gets a leak, the condo association is responsible for fixing it – because it is an exterior feature of the condo. Exterior repairs and maintenance are paid for through condo fees. Everyone in the condo association pays a little money to the condo board each month, and that money is used for commonly-agreed upon bills. What is covered varies from place to place, but here are common features that condo fees may include:

• lawn maintenance,
• sewer bills,
• insurance,
• water bills,
• trash pick-up,
• community pool maintenance,
• community gym maintenance,
• upkeep of the community tennis court, playground, or golf course,
• cable bills,
• snow removal and/or plowing,
• elevator maintenance (if you live in a multi-level building),
• security (for gated communities or multi-level buildings),
• community clubhouse maintenance,
• roof or exterior siding maintenance, or
• whatever the board votes on and agrees to, really.

Of course, some of these bills are things that Homeowners or Property Owners Associations cover if you live in a single family neighborhood. It’s up to you to decide which situation is the best fit for your needs.

There are advantages and disadvantages for each purchase. If you’re a first time home buyer, or someone older who is downsizing, a condo can be very appealing. If you’re somewhere in between, maybe not so much. Here’s my quick guide to understanding the difference between condos and single family homes.

Pros and Cons of Condos and Homes

• Size – Usually – but not always! – a condo is smaller than a single family house. This is not necessarily bad. Depending on your needs, a smaller home might be perfect. There is less to clean and therefore less clutter.

  In Virginia Beach, condos are often built up instead of out. Meaning, your 2000 square feet of space might be spread across three floors straight up instead of out across a single family ranch home.

• Maintenance – This is another reason that many buyers emphatically prefer condos – especially older buyers that don’t want to push that lawnmower through the summer heat. Or young military families – mothers with small children and a husband deployed somewhere in the Med would rather not worry about weeding flowerbeds.When you own a house you are responsible for external maintenance, including mowing the grass, weeding the flower beds and keeping whatever plants you have alive. You can also expect to rake a ton of leaves every fall. Some people enjoy the work, but if you’re like me, you’d rather avoid it.

  When you own a condo, you pay fees to have the association keep the grounds you share with all the other owners. Often the landscaping is designed for minimal maintenance. Your overall workload for upkeep is less when you are in a condo than a house.

• Privacy – Depending on where you are, homes tend to be more private. A house is a self-contained unit generally separated by at least a little space from other houses. In contrast, a condominium shares space with other units by definition. This is a major distinction that every purchaser must seriously consider. If you value privacy and want space from your neighbors, a home is probably a better fit for you.

  There are some advantages to sharing a common area like you do with a condominium though. You might have access to better amenities – pool, sauna, hot tub, fitness center – that would be cost prohibitive to purchase privately. You may also enjoy being closer to your neighbors as well.

• Financial Health – this is where condos and houses vary substantially. Most condo boards are tasked with managing the neighborhood’s financial health. The owners in the neighborhood pay monthly or quarterly fees to cover expenses.

  But what if one (or several) homeowners don’t pay? It doesn’t happen very often, but condo associations can get in trouble if not everyone pays their agreed-upon share.

• Mortgages – Depending on your loan type, getting a mortgage for a condo can be more difficult than with a single family house. For starters, FHA mortgages (a very generous government loan program) must approve of your condo development. Not all developments get the seal of approval.

  So be careful – with a condominium you need to verify upfront that you will be able to use certain types of loans.

• Control – If having complete control over your property is absolutely essential for you, buying a single-family home outside of an HOA is probably best. You won’t have the safety net that a POA is supposed to provide – making sure the area retains certain standards, that home values remain as high as possible and that all owners comply with agreed upon rules.In exchange, you can do anything you like so long as you don’t violate municipal laws: paint your house with glitter, erect a statue of Captain Hook, build a slide from your second floor window to the driveway.

If you buy a home in a neighborhood with an HOA, there will be limits to what you can do. You must obey the rules of the HOA. Say goodbye to Captain Hook and that glitter garage door. However, you get benefits that may keep your neighborhood within certain quality standards.

Buying a condo is similar to buying a house in a POA neighborhood. There will be fees and there will be condo guidelines.

But with a condo, you are sharing even more than a regular HOA. You share a roof with your neighbors and possibly other common areas – all of which you will share financial responsibility for. Associations can be good or bad depending on who is running them.

What Can I Do to Protect Myself?

Maintenance, privacy, control… by now, you’re probably asking “How do I know what I’m getting into before I buy? How do I protect myself if I don’t like it?” The answer is simple: we add a condo (or a POA) contingency to your purchase contract.

What’s a contingency? A contingency is an exit strategy. POA and condo contingencies are very similar. When you make an offer on a house, we’ll ask for a copy of the POA (or condo!) association bylaws and financial statements. After that, you’ll have three days to read them. If, for any reason, the bylaws make you uncomfortable, you can back out of the contract. It’s that easy.

The Final Say: Should I Buy a Condo or a House?

Here’s a quick recap of everything we discussed above.

Homes – Pros and Cons

• Home and yard maintenance is always your expense.
• You don’t have to ask anyone else’s permission to paint your house.
• You are responsible for taking care of all insurance costs.
• There are no condominium fees to worry about paying.
• You have complete control over the property.

Condos – Pros and Cons

• There may be pet or rental restrictions.
• You’ll probably need permission for any exterior changes to the property.
• A condo might provide perks you can’t afford on your own, like a pool or gym.
• Expenses for maintenance cannot be paid on your own schedule.

Each option has its own distinct advantages and disadvantages. Should I buy a condo or a house? It is up to you to decide which fits your circumstances best.