When you’re looking for a new place to live, condos and apartments are probably some of the first options you consider. There are pros and cons to both situations, but your choice will ultimately depend on what’s more important to you: homeownership or the freedom to move around.
If you really want to own your next place but can’t afford to buy a single-family house, then a condominium might be the right choice for you. Condos are often much more affordable than houses and will allow you to build equity and make various tax deductions come next April. As a homeowner, you’ll be able to truly take pride in your place, but there’s still a lot of factors to consider before leaving the world of rentals behind.
When you have a mortgage, your payments pretty much stay the same until it’s been paid off. However, mortgage payments can still end up costing you more than rent. This depends on how big your mortgage is and the interest rates and loan programs you’ve committed to.
Rent, on the other hand, can increase over time. Landlords have been known to raise their tenants’ rent to cover new property costs or to match a rising market price. Once your contract has been finalized, they almost always have the option of charging you more.
As you may have already guessed, the upfront cost of buying a condo is much higher than that of renting an apartment. When renting a new place, your initial payment typically consists of the first month’s rent and a security deposit. If you’re looking to buy a condo, you’ll need to put a sizable down payment down. Most people also end up having to pay lawyer fees and closing costs when trying to lock down their dream condo. Once you’ve actually moved into the condominium, you’ll have to start paying monthly taxes, utility fees, and insurance.
Remember that purchasing a condo also means having to join the community that comes with it. As a member of that community, you’ll need to pay your fair share of homeowners’ association fees. These fees will be used to cover the cost of regular property maintenance, central air conditioning, water, and parking. Make sure to find out exactly what your fees are going towards and what you’ll need to pay separately. Most apartment dwellers won’t have to do this, as the cost of rent is typically all-inclusive.
If you’re not 100 percent sure of where you want to live for the next five, 10, or even 15 years, an apartment is a much better choice for you. Simply put, renters have a lot more flexibility in this area. They can decide how long they want their leases to last and renew them on a regular basis if they feel like staying. Some buildings even allow people to lease apartments on a month-to-month basis.
Before committing to a condo, you’d better make sure that you like everything about it. Conduct some thorough research on both the building and the surrounding neighborhood, and talk to some people who already live there. An unfortunate number of condos seem to suffer from poor management.
If you do end up buying a condo and eventually decide to move, you might have a hard time getting someone to take it off your hands. Condos tend to sit on the market a lot longer than houses do, making them difficult to move out of quickly. Condos also appreciate in value at a slower rate than houses do because they don’t feature any outdoor space. In 2017, land is the biggest driver for appreciation.
Additionally, you’ll want to remember that a number of factors could cause your property to suddenly depreciate.
When you buy a condo, you become a homeowner. You also become fully responsible for maintaining your own property. While you might be paying maintenance fees for the building, you’re still expected to cover the repairs and updates that need to be made inside your unit.
In most cases, renters don’t even have the option of updating their space. Of course, the flip side of that is not having to pay for things when they break. Apartment maintenance falls on the shoulders of the building’s property manager or landlord, and so does the cost of it.
Condo complexes aren’t just places to live. They’re also places where you play an active role in the community around you. Condos often have boards and committees that are made up entirely of residents. These groups are then responsible for deciding how to best manage the property. Your homeowners’ association fees allow you to participate in these discussions. You’ll probably want to be a part of them, as you want to make sure that the people running your building are doing a good job. Talk to your fellow residents to see if they’re happy with the way the place is being run.