Buying a home is a huge investment, consequently, first-time home buyers should consider several factors before making a move. Factors including, location, budget, the proximity of utilities and service centers, etc. must always be on top of your consideration list.
Another critical factor to consider is your family size. Are you looking for a family home or just something for yourself? For a family, the family size and orientation play a role in the type of home to purchase. Home options for a family include a single-family home, townhouse, multi-family home, or condominium (condo).
Condo has become one of the best options for individuals looking to purchase their first home or investors. From affordability to low maintenance, here are some things to know before buying a condo.
What is a Condominium?
A Condominium is a housing complex with several residential units owned or rented by different people. Just like purchasing a single-family home, you can own your unit in a condo depending on the type i.e., freehold or leasehold. Condos come in two housing units upwards, being a housing complex, detached, or standing unit. Unit owners are mostly responsible for the maintenance of their units. Owners may incur other expenses including dues payment and the maintenance of common areas.
Aside from purchasing a condo for residential purposes, it can be a form of investment. There is a common notion that condos don’t offer enough privacy and luxury required by persons with sophisticated tastes. However, you can have luxury condos in Houston that offers extravagance, privacy, full of amenities, and peace.
How is a condo different from a single-family home?
The fundamental difference between a house and a condominium is that a condo consists of housing units within a complex, while a house is a standalone building. Note: some condos are semi-detached or standing units. After purchasing a house, you will own everything that comes with it including the land.
For a growing family, buying a house is ideal. A single-family house comes with more space both inside and outside. You can have a garage, and a personal pool, and upgrade it according to your wish. House owners are responsible for the maintenance of both the interior and exterior of their homes.
On the other hand, for some condos, the owners are only responsible for maintaining the interior of their units. The managers of the property through the dues and other fees cater to other maintenance works including the common areas. This makes condo maintenance less expensive compared to a single-family home.
Types of Condos
A developer of a freehold condominium has transferable ownership of the land and the property. After construction, the developer transfers ownership of the various units to buyers. The buyers own the units and the land it sits on. Freehold condo comes with sole maintenance responsibilities. The owner is responsible for maintaining the interior and exterior of the property. The management of the condo takes responsibility for maintaining common areas and amenities.
Freehold ownership can be classified as we have standard, vacant land, and common elements condos, all of which come with special features and considerations.
For a leasehold condo, the developer doesn’t own the land on which the property is built. The land is leased for a specified period. Therefore, buyers wouldn’t own their units, they just have a leasehold interest in the property. Nonetheless, a buyer has the right to transfer their unit to another buyer or use it for a mortgage, so far as the lease is valid.
Expenses associated with a Condo
A condo under the management of a homeowner’s association attracts several fees including monthly HOA dues. The amount payable each month depends on the location of the condo, and the facilities available. For example, a condo with parking lots, a swimming pool, an entertainment center, and sports facilities will have higher monthly due than one with few facilities.
Other factors that determine the monthly fees are the age of the facility and how it looks. Older condos found within a metro area come with higher monthly dues. The looks and position of the structure may also add more to the fees.
Usually, HOAs with higher fees are managed better, provide better service, and have more facilities than those with lower charges. You always need to ask about such fees before buying a condo.
Pros of a Condo
- They are less expensive and require less down payment compared to buying a house.
- Maintenance cost is less expensive.
- Most condos are constructed in areas with access to amenities and facilities.
- Security is guaranteed
- Monthly dues can be expensive depending on the location and facilities in the condo.
- The resale value of a condo isn’t as high.
- Selling your unit can take longer.
- Living areas are mostly smaller compared to a house.
A condominium is one of the best options for a first-time homebuyer looking for something affordable. With that being said, always be in the know about the terms and conditions, regulations, dues, and other expenses before a purchase. Knowing the rules is very critical because anything contrary can put you in a mess or lawsuits. If your lifestyle is opposite those regulations, look elsewhere. Most importantly, inquire whether the condo you are buying is a freehold or leasehold.