Every type of residence brings with it a host of things to consider, and we’ll be the first to tell you that this is not necessarily common knowledge. A seller will not easily surrender information that may jeopardize the potential sale, so it is up to the buyer to do as much research as possible in advance.
First let’s look at the basics – what is the difference between a condo and a house? A condo (short for ‘condominium’) is an apartment that you own, usually in a shared building or a complex, and is typically much smaller than a house. The building or complex is usually owned and maintained by a condo board, or homeowner’s association (HOA) whose responsibility it is to take care of all common areas (parking areas, swimming pools, the clubhouse, etc.), and the external appearance (painting, pavements etc.). Because of the lower unit cost, condos are generally very popular with first-time buyers, people who want to downsize, or as secondary investment property. It is worth noting that there are additional, unavoidable costs associated, for example HOA fees, which add onto monthly expenditure, and over time add up to a higher unit cost.
Next we look at finances. Aside from the real estate listing cost, there are many more things to consider in both instances. As mentioned above, condos carry additional HOA fees, and depending on the building or complex, these may be much higher than you think. A good rule of thumb to follow is that the more additional amenities there are, the higher the HOA costs. Since you are only responsible for the interior of your unit, you are not responsible for external maintenance costs – these are covered by the HOA fees. A common error that condo-owners make is in assuming that they would not need homeowners insurance because it’s unlikely for something to happen inside their home. Don’t be caught unawares! Life happens, and if your boiler explodes and floods your condo, the neighbour and the floor below, your homeowners insurance better be well in place!
In a house the homeowner’s insurance tends to be higher since you are responsible for all sides of the property.
When comparing condos and houses, there are some things to consider which are not as obvious as money, location and insurance. Consider the community you will live in – in a condo your neighbours will be much closer than in a house. In a house you can easily stay completely isolated if that is your preference, but making friends with the neighbours can be beneficial especially in case of emergency. The good thing is that you never have to deal with the HOA – the potential negative is that you are on your own unless you make the effort.
In a condo you live by the HOA’s rule of law – and this is final. You may want to make suggestions about the maintenance of the complex/building, but if you are not a part of the HOA then your word is really not worth too much. If your HOA is not managed well, there is also the risk of poorly maintained common areas, or disagreements between owners/tenants which can cause a lot of stress within the community. The plus side of dealing with a good HOA is not having to worry about these thing, however on the other hand, a bad HOA may leave you wishing you had bought elsewhere.
A great suggestion is to work with a realtor that is familiar with the area you are looking to buy in, and you can go from there. If you have questions or aren’t sure if a condo or single-family home is right for you, send me a message and let’s chat.