Condo Vs. House: Which Option Is Best For You?
Buying a home is a worthwhile investment. But, according to HomeLight, it's all about perspective and thinking of it as a safe space, a shelter for the family, rather than an investment. So you're in the market for a new home, but which option is the best for you? You get to choose from a lot of types, including townhomes, condos, single-family homes, apartments, and duplexes. Depending on what stage of life you are in, a place with roommates is also an option.
While the choices for homes are many, we will focus on the two most popular: condos and houses. But which one should you get? While they both offer a ton of similar gains, there are some differences worth considering. From variations in cost and appearance to features and maintenance and the resale value of each one, there are many aspects you need to factor in, and we'll go into details about each. Whether you are a first-time homebuyer or looking to move into your next home, we've got some great pros and cons for you to consider when looking at both. So let's get started and hopefully make that decision a little easier for you.
Pros of buying a condo
So, why you should consider buying a condo over a single-family home? According to NerdWallet, condos are usually priced lower than houses. The financial company also says that data from the NAR (National Association of Realtors) shows that the median price difference of a condo vs. a house in 2020 was about $42,000. In costly areas like the Bay Area or New York, that's a big difference. Neighborhoods in big cities vary as well, so ensure you consider that when looking at buying a home.
Besides price, another advantage of buying a condo is that it requires low maintenance. In addition, homeowners don't have to worry about the building's exterior, like the gutters or exterior paint, as the homeowner association in the area usually covers that. And last but not least, a big pro is what the building community may offer, like a fitness center, pool, or clubhouse, for use by condo owners.
Cons of buying a condo
As mentioned, the HOA (Homeowners Association) fee is something you do not have to pay when you own a single-family home. The HOA covers the cost of anything on the property's exterior, like painting, lawn, and roof; it's added on top of the mortgage and can increase at any time. There are also plenty of rules that need to be followed, like noise levels and pets, which you need to consider thoroughly if you want a condo, CMHC notes.
Another con is the lack of privacy and space. While a condo encourages community because the homes are close to each other, there is a lack of real privacy that you would have with a single-family home. There can also be a lack of space in terms of a backyard, which could be problematic if you have a dog that loves to run around or kids you would like to take outdoors every other day.
Pros of buying a house
Properties vary in size, amenities, and styles, so you can really get your dream home when looking at houses vs. condos. Do you want a one-story or two-story home? Hardwood floors or carpet? As Pepper Money notes, the customization aspect of a home is much broader than what you get with a condo. The resale value is also higher compared to that of condos, making this a bigger gain if you ever want to put your home for sale sometime in the future. In addition, it's usually easier to sell a house versus a condo, so be sure to look at the market and see what the trend is to help steer you in the right direction.
A big pro of buying a house is the privacy and space that it provides. Back and front yard to run around and play is great for families with kids and pets. No neighbors above, under, or next to your home is also great. There is also no noise or pet rules since you own the land that the house is on.
Cons of buying a house
The biggest disadvantage to buying a house is all the upfront costs that need to be made before the property is yours. The first one is the down payment, which, according to Rocket Homes, is typically in the thousands right off the bat. While you don't have to put down the 20% suggested, you'll usually need to pay private mortgage insurance.
Another con of buying a house is the maintenance associated with it, especially if the home is older and needs repairs. While that can be fun for DIYers and those with a building background, it can be stressful for a family that is not into this kind of labor. It's also something that requires time and energy investment. Lastly, while the resale value of a home is usually more than that of a condo, the purchase price can be higher, and the competition is bigger. This can result in being outbid or having hefty negotiations.
Durability and maintenance
The maintenance is definitely low when owning a condo vs. a house. According to Bankrate, the HOA fee that every condo owner has to pay is used for the building's exterior; this means it covers repair and upgrades to the gutters, paint, and yard care, among other things. Single-family homeowners have to handle all that, as well as anything else inside the home. Both condo and homeowners still need to take care of the home's interior, including things like HVAC and pest control.
Depending on how old the home is, a condo might have better durability if it's been constantly fixed, maintained, and renovated. With an older house, there may be some things like the foundation or roof that need to be repaired, which can not only make the homeowner's expenses go up but also require time and research in order to get the best contractors and negotiate a price to fix it. A condo that has the HOA to pay for those things, and they negotiate on your behalf.
When to choose a condo vs. a house
So how do you decide which home type is best for you? According to U.S News, a condo is the best bet if you live in the city and want a low-maintenance home, a community, and fancier amenities. A condo is also a great starter home for a first-time buyer. There are fewer things to worry about as the HOA takes care of the exterior, and the community aspect is great for those just moving to a new city for a new job or because of other reasons.
If privacy, resale value, and full ownership are what you want, a house is the best option for you. Homeowners are responsible for the entire property, which is great for those who love customization and remodeling projects. While there are repairs that need to be made throughout the ownership, those drive up the resale value should you choose to list the place at some point. You have more control over most costs as well. Families with kids also choose single-family homes because of the space and privacy it provides.