If you’re a first-time homebuyer or an older buyer looking to minimize home maintenance, a condominium could be a good fit for your budget and lifestyle. New construction condos provide the added bonus of being built to match buyers’ desires for an open floor plan, energy-efficiency, and plenty of windows for natural light.
Approximately 15 percent of buyers purchase new construction homes rather than resales, according to the National Association of Realtors’ 2018 Home Buyers and Sellers Generational Trends Report. That report also found that while just four percent of all buyers choose a condo, that number increases to six percent for those between the ages of 63 and 71 and to 12 percent for buyers over age 72.
First-time buyers may also find a condo a good way to ease into homeownership since they typically require less home maintenance. Condos are also often a less costly option than a single-family home, and any added expenses will likely be going toward your HOA or upkeep of other common area amenities.
Understanding condo ownership
While many condos are similar to apartments in a mid-rise or high-rise building, you can also find town home-style condos and occasionally even detached homes in a condo community. The term “condominium” refers to the ownership structure. In a condo, residents own their individual unit and the condo association jointly owns the land and common areas.
Condo fees vary by community, but they generally cover the taxes, master insurance plan, and maintenance on the common areas and often include trash pick-up and snow removal. In some cases, utilities and access to amenities such as a swimming pool or a fitness center are included in the condo fee.
Since some of the property is covered by the association, your individual property taxes and homeowner’s insurance are generally lower than they would be for a single-family home.
Advantages of condo ownership
For many buyers, a condo offers the best of both worlds: the low-maintenance aspect is similar to renting, while ownership allows them to build equity over time. Condo owners typically are responsible for the interior of their home, while the association maintains the landscaping, parking areas, amenities, and exterior elements of the home: roof and outside walls.
Condos can often be a more affordable option, although you do need to factor in the condo fee when estimating your monthly housing budget.
Important Things to Know for condo ownership
While condo living has its benefits, it’s important to be aware that as a condo resident you must pay your condo fees and follow all the condo association rules. Condo fees are not tax-deductible, as are some other housing expenses. The condo association can choose to increase condo fees and can charge a special assessment for things like roof replacement or repaving a parking lot.
When you compare new construction condos, be sure you understand what the condo fee covers and read the association rules so you know whether the community will fit your lifestyle. Whether you’re looking to downsize or are just starting out in the world of home ownership, condos can be a great living option for you, and understanding all that condo life has to offer is the first step in choosing the right place.