Is the Condominium lifestyle right for you?
For many aspiring homeowners, buying a condominium is an affordable way to transition from being a renter to reaping the benefits of homeownership without the added cost of maintaining a house with a yard. Condos also come with added perks many first-time homebuyers might not be able to afford in their starter homes such as a swimming pool or hottub, or resort-like amenities such as tennis courts and security guards. With the successful revitalization of our downtown area, condominiums prove to be an ideal "lock and leave" lifestyle for many different types of home buyers. Ask yourself the following questions to get an idea if condo life is the life for you!
How much freedom do you need?
If you travel frequently and don't like to handle yard work or routine repairs, a condo may still be your best bet, analysts say. Your association dues in a condo cover most of the upkeep, and the close proximity with your neighbors allows them to keep an eye on your place when you're gone. However, buying into a condo also means less freedom for exterior changes. And lobbying the board for improvements can be a lengthy political process. Are you prepared to fight for those new pool chairs?
Do you foresee moving in the next five years?
While condo prices have cooled some in markets, they are bouncing back in the long term, experts say. If you can afford to stay in a property for five years, it will almost certainly appreciate in value. On the other hand, if you are looking to flip a property or you might need more room in a year or two, a condo might not be the best choice.
Are condo fees reasonable and affordable?
Your mortgage payment is just one part of the monthly tab for a condo. Monthly association fees, which are not tax deductible, also are required to provide landscaping, painting and other upkeep. In a recent survey by the Community Associations Institute, 30% of respondents belonging to homeowners and condo associations reported paying $101-$300 per month in association fees. Can you afford this expense?
Additionally, consider whether the development has sufficient reserves to cover big repairs when they are needed. Almost 40% of the CAI's survey respondents reported paying $50 or less in fees per month. While a low payment might look attractive, it can often cost you down the road.
Is your local market strong?
How have prices for condos fared in your area? Are they going up as strongly as single-family housing? Your local realtor can help you with the market statistics in the particular area in which you want to live.
Is this an investment or a lifestyle choice?
Over the long haul, condos may not appreciate as much as single-family homes. On the other hand, condos in many urban areas are much more convenient to shops, entertainment and other amenities. Are you willing to give up some appreciation to save money on gas and eliminate that long commute?