Whenever anyone asks me if condos are a good idea, I always give the same answer “Well, that depends.”
You see, each one of us is an individual and what would be the perfect home situation for one person might be a nightmare scenario for another. So, to help you decide, I’m going to run through some of the elements of condo living, which fans of condominiums consider to be positive.
14 Reasons Why Condos Are A Good Idea
So condos may be a good idea for if you, if what you seek in your home purchase is:
An Attainable First Step On The Property Ladder
While there are markets in which a single-family house is still an entirely attainable first home, in other markets it is becoming increasingly difficult, or even virtually impossible, to choose a house as your first purchase.
For those first-time buyers who find themselves living in a part of the country where a single-family-house is something you work your way up to, a condo can be an excellent first step on the property ladder.
Even if you are not thinking of building “property wealth” in the long-term, a condo can be, for some people, the only way of purchasing a home of their own. If you are thirty-something and still living at home with your parents, then buying your first condo can be an excellent idea, for you and them!
Of course, in some markets, such as Manhattan, condos actually attract a premium because they are more attractive to buyers than the co-ops with which they compete. So “the most affordable option” doesn’t always apply to condos, but for a large percentage of buyers, condos remain the attainable property choice.
The Location, Location, Location, Of Your Dreams
An element of condo ownership and living, which runs parallel to the “attainable first step on the property ladder” point is that condos are an excellent choice if you want to move to a luxury location but do not have the funds for luxury location property prices.
If you are an ardent fan of the ski hills, a sun worshiper who has to live within a stone’s throw of the beach or even a would-be tech billionaire who wants to live among the internet royalty in Silicon Valley a condo might be your only option to hang your hat in your desired location.
All of The Added Comforts And None Of The Added Problems
While not true for every development, the majority of condos have additional amenities for the residents and their guests.
These can range from the simple, such as an activity room in which you could host a family gathering or party, to the luxury, such as a spa, top of the range fitness facilities, a concierge service, etc.
Several condo developments are even planned around exclusive amenities, designed to entice buyers in crowded markets.
If you would like the added convenience of a gym, secure parking, a swimming pool, tennis courts, golf club, or any other amenities which you may wish to enjoy, then a condo with these facilities on-site might be just the thing for you.
A Sense Of Community
Now, this point may be a controversial one for some people. After all, it is not necessarily the form of ownership or the design of a building which creates community; it is the people that discover an affinity with each other or who identify with other locals of the ethos for which the location stands which truly create a community.
Having said that, just as you would get a “feel for the place” when you went to view a house, you may also get a sense of whether or not you will feel comfortable and connected to your neighbors when you view a condo.
Not only that, it is often clear from what you can discover online, by hanging out in nearby stores and eateries, and by asking questions of your real estate agent, whether or not the condo building in which you are considering investing your hard earned dollars, has the kind of community feel you would like.
And when I say “community feel” the concept swings both ways.
This can be the kind of community in which everyone knows everybody else, where neighbors know each other’s names and business and in which all of the residents like to interact and mingle on a regular basis.
On the other hand it might suit you better if the “community” is one in which your neighborly interaction is limited to a brief nod when you bump into each other at the mailboxes, or a minimal amount of inane small talk when you accidentally find yourself in the elevator with someone, despite your best efforts to avoid this situation.
The Dream Home For The Practically Adverse Or Practically Challenged
For some people, one of the most positive elements of condo living is that you do not ever have to lift a screwdriver, wield a wrench, or take part in any kind of DIY renovations or maintenance in any way shape or form.
The actual boundaries of a condo can vary from development to development but, generally speaking, the condo unit owner is responsible for everything from the surface of the walls, floor, and ceiling, inwards.
As a result, all of those annoying things that you need to keep on top off with a single-family home can be blissfully avoided in a condo. When you live in a house, and your window is sticking, the problem is yours and yours alone. You are the one who has to Google “What makes a window stick?” and then trawl YouTube a video which not only claims to tell you how to fix it but actually delivers on that claim.
And that’s not the end.
Then you have to go and walk around your local DIY store, looking for the items you need. Then, when you can’t find them, you have to walk around a bit more to find a member of staff to help you find what you need.
Once you’re home you then have to find the video again, because you forgot to bookmark it, watch it seven times before you are confident you know what needs to be done and then, finally, have a go at fixing it yourself.
Alternatively, you can live in a condo, discover your window is sticking, pick up the phone, call the building manager, and have them worry about it.
A Life Free From (Some) Organizational Hassles
In a similar vein to the previous point, condo living affords you the luxury of handing off the hassle of finding someone to come in and perform any repairs or maintenance.
As a homeowner with a single-family house, you have to already know a reliable professional whom you can trust to come and repair your plumbing, rewire your home, or fix your leaky roof. If you don’t have someone that can be relied upon to do quality work at an appropriate price, you have to spend your valuable time canvassing friends and neighbors or internet reviews to find an honest and dependable person to help you out.
Not only that but you are required to schedule appointments, arrange to have someone home, deal with the invoicing and payments, it can be a real hassle.
Now consider the fact that when you live in a condo, the building management has all of those issues to deal with, and not you.
What could be easier?
All The Joys Of The Garden In A Life Free From Yard Work
Do you love spending your weekends weeding the garden? How about getting up early on a Sunday morning to mow the lawn? Or maybe you adore the frequent chores of trimming, pruning, deadheaded, sweeping, raking, watering, and all of the other fun jobs that are associated with owning a home with a garden, even a small one.
Condo living means you never again have to lift a trowel unless you want to. The homeowners association, which oversees the repairs and maintenance of all of the condominiums communal areas, which usually includes any grounds, gardens, and landscaping, will do it all for you.
This delightful quirk of the condo world allows you to, if you so desire, chose a condo with communal landscaping and gardens, enjoy your spare time communing with nature, then return to your own home secure in the knowledge that you don’t have to spend any time at all digging, primping or tidying the landscaping.
Oh, and you won’t have to buy, store and maintain gardening tools either.
There’ll be no digging half an inch of mud out from under your nails, scrubbing at the ingrained dirt in your skin, or trying to moisturize nasty dry cracks or rough calluses on your hands.
Freedom From Sudden Repair Bills
The Home Owners Association of a condominium development is not only responsible for the management of the day-to-day repairs and maintenance of the buildings common areas, but it should also be building an HOA condo reserve fund.
This is basically the equivalent of any other homeowners emergency or “Big Expensive Home Renovations” fund. A percentage of the monthly HOA fees is set aside in order to build a reserve fund.
The fund should be built with a maintenance schedule in mind. This way, when the time comes to repair the roof or replace the windows for the entire development, the money is on hand to do so.
In addition, this fund is there so that, should there be any natural disaster or other unexpected event which causes significant and costly damage to the development, you don’t have to worry about finding the money to fix things, the reserve fund is there to take the knock.
Smaller Home With Smaller Costs All Round
We have become somewhat programmed to believe bigger is better, especially when it comes to properties.
Some people feel differently, and there are many ways in which small is beautiful.
- Filling The Space: A condo needs less furniture and less work to impress your own particular sense of style or personality.
- Keeping It Clean And Tidy: If you are on team “I hate cleaning and would rather go out and enjoy myself than push the vacuum around my home for an hour” a condo is your ideal abode. Less square footage equals less dust and dirt, which equals less time and money spent cleaning which equals a happier you.
- Freedom From Stuff: There is a certain truth in the phrase which says “You do not own things, things own you.” For some people, the larger their home, the more inclined they are to buy “things” because they have the space. In a condo, there is less temptation to fill your home with piles of belongings. As a result, you have fewer things about which to worry.
A More Sustainable Home
A condo isn’t necessarily an inherently “sustainable” home. However, it is easier to live a more sustainable lifestyle in a smaller space than a larger one. You instantly have less space to heat or cool, will, hopefully, be using less in the way of water and energy, and by owning fewer things you should be consuming fewer resources all around.
In addition, the majority of condos are in locations which are closer to or have better transit links to, city centers which often means you do not have to own a personal vehicle in order to get to and from work.
A bonus for you, your pocketbook, and the environment.
A Butt-Kicking Investment
Not all condo buyers are interested in setting up home in their newly acquired abode. Some are property investors who have discovered that, in some markets, condos can be a stellar investment.
As we have already discussed, the condos Homeowners Association is responsible for general repairs and maintenance so a small investor, or an investor moving into a new geographical market, can dip their toe in the local real estate, without the problems of being at the beck and call of tenants for any little property issue.
The investment potential can be increased if the condo is in an especially popular building or in a much sought after location.
A high-quality beachfront condo in a popular location could potentially bring in thousands of dollars a week during the summer. Or you could capitalize on the opposite season and reap the financial benefits of owning a ski resort condo in the winter months.
A particularly savvy condo buyer could bring in enough rent during the peak season to cover an entire years mortgage and/or Homeowners Association fees, and then live in the condo for the rest of the year, cost-free.
In fact, I know of a few people who have carefully researched a particular rental market then bought a condo and rented it out to holidaymakers. The rental income is enough to travel & enjoy themselves while the condo is occupied by paying guests AND live in the condo during the offseason. The condo rent is actually enough for them to live on year round and enjoy an excellent standard of living while they are about it.
Which brings us onto….
The Flexibility To Live The Life You Want To, Or May Have To, Live
Even if you are not in a position to purchase a prime location condo with which to refill your bank account each year, a condo is still a beautifully flexible home to buy.
If you’ re offered a prime but temporary work assignment, a once in a lifetime opportunity that requires you to be away from home for a few months, or even if you want to take a half-year sabbatical to travel and find yourself, a condo offers a much better opportunity to recover some, if not all of your housing costs than a single family home.
The same goes for a situation when you are needed elsewhere for an extended period. Perhaps a relative is ill, and you are going to look after their family and home while they are in hospital, or maybe one of your parents is declining in health and needs an extra hand before finding a place in a supported facility.
Any number of unexpected events may require you to leave your home but, unfortunately, the fact that your life is on pause doesn’t mean that the bills are also on hiatus. Being able to find a short(ish) term renter for your home may be the difference between crashing and burning or keeping your head above water financially.
Providing your Homeowners Association doesn’t have rules explicitly forbidding short term rentals, it is much easier to find someone who needs a condo for a couple of months than it is to find someone who needs or can afford an entire house for a restricted period.
Potential Tax Savings
You may find your budget gives you a choice between renting a larger home or buying a condo. If this is the case, and all other things being equal, in a buoyant market purchasing a condo and becoming a homeowner might present you with some tax advantages over remaining a renter in someone else’s house.
You can deduct the interest you pay each year on your mortgage. This deduction applies to the interest on the first $750,000 of your loan. If you purchased an additional property before 2018, you can also claim the interest on the second loan.
In order to make tax savings you need to:
- Claim itemized deductions, AND
- Have total itemized deductions which are greater than your standard tax deduction, which is currently $12,000 per year.
So, if you added up all of your itemized deductions and they came to $12,001 or more, it is worth filling in the longer 1080 tax form. If they come to $12,000 or less, stick with your standard tax return.
A Way To Build Some Equity
Admittedly, the amount of equity and the speed at which you build it will depend on the market in which you purchase.
The thing is.
Don’t believe those who make the blanket statement that all condos are a bad investment and that they never increase in value at a rate in which you can build a decent nest egg.
Yes, it is true that you are unlikely to buy a condo and see a dollar value increase that rivals a single family home. Then again, there are plenty of real estate markets where, if you purchase a condo it will appreciate and, the return on your investment will easily out-pace that of leaving your money in a high-interest bank account or dabbling in the stock market.
Condos are good for some people, and for others, not so much. If you have read through and you like the sound of these positive condo living highlights then a condo may well be a good idea.
About The Author
Geoff Southworth is the creator of RealEstateInfoGuide.com, the site that helps new homeowners, investors, and homeowners-to-be successfully navigate the complex world of property ownership. Geoff is a real estate investor of 8 years has had experience as a manager of a debt-free, private real estate equity fund, as well as a Registered Nurse in Emergency Trauma and Cardiac Cath Lab Care. As a result, he has developed a unique “people first, business second” approach to real estate.