Should You Buy a Condo? Pros and Cons of Condo Ownership

You’re ready to invest in real estate and become a homeowner, but you aren't sure if you should buy a house or a condo. There are advantages and disadvantages to either choice, so it’s wise to do some research before you start your search.

Many assume owning a condo is more affordable than a house, but that isn't always the case. Let’s look at the pros and cons of buying a condo.

A condo is a single-living unit located in a building with multiple units. It’s like an apartment, but you own it rather than rent it as you do with an apartment. As a condo owner, you have many of the same responsibilities as someone who owns a home. You are responsible for paying your property taxes, utility bills, and any maintenance needed in the condo. But you also earn equity with your condo and can take tax deductions on the mortgage interest you pay, things you can’t do if you rented an apartment.

One of the biggest advantages of buying a condo is that you don’t have a yard or property that needs to be maintained like you would have if you bought a house. This makes condo ownership attractive to retirees looking to downsize and young professionals just starting out who don’t want to bother with a yard.

Since you own your condo, you also have more flexibility on the improvements you can make within it. You can paint the living room, add new flooring, or even knock down a wall to open up the kitchen.

Another advantage is that condos enable people to own living space in places like a big city where you have many things conveniently located to you. Sometimes, condos can also be more affordable than buying a home.

Condominiums often have different amenities condo owners can access without leaving their building, such as a gym, swimming pool, or community room. The building may also have security available through a concierge or call box.

Most condominium buildings charge condo owners monthly fees, called homeowner’s association (HOA) fees. HOA fees are used to maintain the common areas within the building. For example, having a pool in your condo building is nice, especially since you don’t have to maintain it. However, you do have to pay your share for the condo association to hire someone to maintain the pool.

When deciding whether to buy a home or condo, you should pay attention to the condo HOA fees because they may make the condo a more expensive option than buying a house. For example, a $250,000 mortgage at 5 percent will cost you $1,342 per month if you buy a house, but if you buy a condo with an HOA of $400, your monthly living costs will be $1,742.

Although you have more freedom to do what you want when you own a condo rather than rent, you don’t have as much freedom as you would if you owned a house. That’s because condominiums usually have a condo association board that governs the building and sets rules on what you can and can’t do.