Pros and Cons of Buying a Condo: Is It the Right Move?
When you buy into a condominium, in most circumstances, you own the interior of your unit, while the land and shared areas are owned and maintained collectively by all unit owners.
With this ownership format, you may wonder if a condo is a good investment. The answer depends on your lifestyle, finances, and long-term goals. Condos can offer many benefits, but they also have unique qualities you must understand before buying. Read on to learn more about all the condo pros and cons.
What is a Condominium?
A condominium, or condo, is a type of housing in which individuals own their specific unit while sharing the ownership and responsibility for common areas, including hallways, elevators, and amenities. These shared spaces are often managed by a condominium association (COA) made up of unit owners and an elected board of directors.
The board runs the condominium association on behalf of all owners. The board’s duties include:
- Maintaining common property
- Enforcing community rules
- Collecting dues
- Managing finances
Condo vs. Single-Family Home
In a neighborhood of single-family homes managed by a homeowners’ association (HOA), the association owns common areas, such as lobbies, pools, and gyms, and all owners are members of that association. In a condominium association, individual owners own a percentage of all shared property; the association doesn’t own any real estate. Understanding this difference is important, as it drives operations, procedures, and policies. It may also affect things like taxes, insurance, and refinancing requirements.
The Pros of Condominium Association Living
Condo living has many benefits, especially for buyers seeking simplicity, convenience, and camaraderie. While every condo is different, here are some of the most popular advantages:
Amenities
Condos usually boast plenty of offerings to keep residents entertained and engaged. Typical amenities include:
- Pools
- Fitness centers
- Clubhouses
- Tennis courts
- Pickleball courts
- Spas
“Now more than ever, people are calling for amenities that support wellness. Whether it’s a gym, walking trail, playground, or multi-use court, these conveniences allow homeowners to get moving, continue healthy habits, and engage with their neighbors” - Rose Jurczewski, CMCA®, AMS®, Associa Chicagoland
Related: Top 10 Amenities Residents Want
Less Maintenance Responsibility
Say goodbye to yard work, snow removal, and exterior repairs. In many condos, the association has it covered, employing contractors to handle landscaping, maintenance, and more. This can be especially appealing for busy professionals, frequent travelers, or owners looking for an easier way of life.
Enhanced Security
While security varies by community, shared buildings often provide an added sense of safety compared to standalone homes. Most condominium communities feature:
- Controlled access
- Security cameras
- Secure entry points
- On-site maintenance staff
- Monitored common areas
Location
Condos are often located in urban centers, coastal areas, or desirable neighborhoods where single-family homes may be limited or unaffordable. This allows residents to live closer to work, entertainment, dining, and public transportation.
Affordability
In many markets, condos offer a lower purchase price than single-family homes. While monthly association fees apply, the upfront cost can make homeownership more accessible, especially for first-time and FHA-loan buyers.
Read More: FHA Approval 101 for Condo Associations
The Cons of Condo Association Living
Condo living isn’t for everyone, and buyers should be aware of these condo downsides before making a decision.
Condo Association Fees
Monthly, quarterly, or annual assessments help cover maintenance, insurance, and shared expenses. While these fees provide value, they add to the overall cost of ownership and can increase over time. Special assessments may also be levied if unexpected repairs arise.
Related: HOA Fees: A Breakdown of All Charges
Lifestyle Restrictions
Condominium associations enforce rules to maintain consistency across units and protect property values. Rules may include limits on:
Before signing on the dotted line, confirm the rules align with your lifestyle.
Limited Space
Condos tend to have less square footage than single-family homes. Storage and outdoor space may also be limited, which can be a concern, especially for growing families. Check for outdoor amenities such as terraces and courtyards that provide additional space. Families may also want to look for nearby parks and playgrounds.
Lack of Privacy
More often than not, condo owners share spaces with other residents, including walls, hallways, balconies, elevators, stairwells, and amenities. This shared living environment might deter some buyers.
Potential Parking Issues
Parking availability can be limited in some condo communities, especially in urban areas. Assigned spaces, guest parking rules, and shared garages may not suit every household.
Read More: A Winning Parking Playbook For Any Community
Evaluating The Condo Board: Review Before You Buy
To really know whether a managed property is right for you, it’s crucial to understand how it operates. A well-run condo association has a healthy budget, maintains property values, is in touch with community members, and acts fairly. Learn more about the condo board by carefully reviewing the governing documents and getting insights from the selling agent before you buy. Here’s what you should consider asking:
1. How does the board prioritize communication with residents?
Is the board easily reachable? What rules apply to communicating with them? Look through the governing documents or a new owner welcome packet to learn more. Boards that facilitate owner interaction tend to have better relationships with the community.
2. How does the board foster transparency?Don’t be afraid to probe the selling agent. You’ll want to know that the governing documents, financial records, and other key association details are readily available to residents. It’s also a good sign when the board holds open meetings to help members stay up to date.
3. How are the community’s finances managed?
Review the budget and any financials you have access to. All boards should be tracking records, regularly reviewing vendor contracts, collecting dues and late fees, and partnering with qualified accounting professionals.
4. Are rules enforced fairly?
Check the governing documents for rules and enforcement procedures. An effective board will promote reasonable regulations, document violations, have a conflict resolution policy, and remain objective when enforcing rules.
5. How are the board’s legal and ethical standards upheld?
Within the governing documents, you’ll find the bylaws, which detail the responsibilities of the board. Review and ask the selling agent how board members uphold ethical standards and codes of conduct—this significantly impacts how the association runs.
Buying a Condo in Mexico: What You Should Know
Buying a condo is great for people seeking convenience, additional amenities, and less responsibility. Just beware that you may have to manage additional fees and rules, along with closer quarters. With these condo pros and cons in mind, explore all opportunities, including ones outside of the United States. Read “HOA Condos for Sale in Mexico: What You Need to Know Before You Buy” for information on units across the border.
Condo Pros and Cons FAQs
Do condos appreciate as fast as houses?
How condos appreciate in value varies by market, location, and demand. Typically, single-family homes see faster appreciation due to land ownership and fewer regulations.
What do condo fees typically cover?
Condo fees often cover common area maintenance, exterior repairs, insurance for shared structures, landscaping, amenities, and management services.
Can you renovate the inside of a condo?
Interior renovations for a condo unit are sometimes allowed, but they may be heavily restricted and require approval from the condominium association.
Is it harder to get a mortgage for a condo?
Mortgage approval can be more complex for condos, as lenders review both the buyer and the association’s financial health, insurance coverage, and owner-occupancy rates.