Pros and Cons: single-family homes and condos
In today's real estate market, the high demand for housing in urban and suburban areas often poses challenges for prospective homebuyers. The escalating prices of single-family homes in these desirable locations often make them unaffordable for many, leading you to explore alternative options such as condominiums.
We’ll help you compare and contrast buying a single-family home with purchasing a condo, taking into account factors such as ownership, maintenance services, shared spaces and amenities, affordability, homeowners association (HOA) fees, resale potential, and your ability to make changes and choose your own design.
Understanding Condos
A condo, short for condominium, is a privately owned residence that is part of a larger complex. Condos provide an opportunity for homeownership without the inflated costs and added responsibilities associated with buying a single-family home in the same area.
Condo ownership grants individuals the benefits of homeownership, including building equity, while also providing access to amenities and services offered by the local homeowners association, such as gyms, pools, shared outdoor areas, and general maintenance services.
Unlike apartments, condos are owned outright by their occupants, with the property title fully transferred to you.
Ownership and Financial Advantages
One significant difference between single-family homes and condos lies in ownership. Single-family homes are typically owned outright by you, offering you complete control over the property. On the other hand, condos are owned by individuals within a larger complex, and certain decisions may be subject to the rules and regulations of the homeowners association.
Financially, single-family homes offer the potential for property value appreciation and complete control over any improvements or modifications. Condo ownership allows you to build equity and potential financial gains, but certain decisions may be subject to approval from the homeowners association.
Maintenance and Upkeep
Maintenance responsibilities differ between single-family homes and condos. When you own a single-family home, you’re solely responsible for the maintenance and repairs of the properties, including both interior and exterior upkeep. This gives you the freedom to personalize and modify the home according to what you like and how you want to live.
Condo owners, however, benefit from shared maintenance services. Homeowners association fees cover external maintenance and upkeep of shared areas, relieving you of these (sometimes laborious) tasks. While condos offer convenience in terms of external maintenance, modifications or repairs within the unit are typically your responsibility.
Shared Spaces and Amenities
Single-family homes typically do not offer shared spaces or amenities beyond what is included on your property. On the other hand, condo complexes often provide a range of shared spaces and amenities for you to enjoy along with your fellow condo owners. These can include pools, gyms, common areas, and outdoor spaces. Homeowners association fees fund the maintenance and upkeep of these facilities, fostering a sense of community and providing additional perks for you.
Affordability and Price Point
Single-family homes are often more expensive than condos in the same area. The higher cost can be attributed to the larger size, exclusive ownership, and potential for more extensive land ownership. However, single-family homes offer you more privacy, space, and freedom to make the home your own, inside and out.
Condos, on the other hand, are typically more affordable due to their smaller size, shared ownership costs, and lower maintenance responsibilities. They provide you an accessible entry point into desirable locations, making them an appealing option if you’re on a budget or if you prioritize community living over larger living spaces.
Homeowners Association Fees and Rules
Condos generally require you to pay homeowners association fees, which cover various services, amenities, and maintenance expenses. The amount of these fees can vary depending on the condo complex and the services provided. While these fees ensure maintenance and shared amenities, they also need to be factored into your monthly budget, and may make owning the condo more expensive than you initially thought. It is essential to understand the fee structure and compare it to the services and benefits offered by the homeowners association.
Single-family homes, on the other hand, do not typically involve homeowners association fees. This gives you more financial flexibility and control over expenses but also requires you to be responsible for all maintenance and upkeep.
Resale Potential
Reselling a single-family home can be relatively straightforward, as the market demand for detached homes is often high. Buyers have more options to choose from, and the uniqueness and individuality of each property can attract potential buyers.
Condos, on the other hand, may have more challenges when it comes to resale. Units within the same complex are often similar, and homeowners associations can have restrictions on selling or impose high fees, potentially limiting the pool of interested buyers. Multiple vacant units within the same complex can also impact demand and resale value.
Individualism and Design
Single-family homes offer you the opportunity to design the home to fit your personality and taste. You have the freedom to make changes to the property's exterior and interior, allowing them to create a unique living space that reflects their preferences.
And you could use the equity built up in your home to help you fund large renovation projects, using a home equity line of credit, or HELOC.
Condos, on the other hand, often have restrictions on exterior modifications and major construction projects. Homeowners associations regulate these changes to maintain uniformity and the overall aesthetic of the complex. This can limit your personal creativity and cut down on your customization options.
Weighing your options
When considering buying a home in a high-demand location, it's essential to weigh the pros and cons of both single-family homes and condos.
Condo living:
Pros:
- Association usually handles things like snow removal, roof maintenance and garbage
- Sometimes your dues will cover necessities like cable and wi-fi
- Many larger associations offer on-site maintenance, which can be great when you need something repaired
- Some buildings have amenities like gym, pool, storage, party room, etc.
Cons:
- Shared space will keep you in close proximity to neighbors
- Association fees can be pricy, especially if the list of amenities is long
- Renovations typically need to be approved by the association
Single-family home living
Pros:
- No association fees
- You can do what you want with your home, inside or out
- Most likely you’ll have your own yard
- Price appreciation tends to be higher in a single-family home
Cons:
- Property taxes can be higher
- You’re in charge of maintenance, including exterior jobs like snow removal, raking leaves and more
- No one but you when an issue arises with a larger appliance or other part of the home
Single-family homes offer greater ownership control, individualism in design, and potential for property value appreciation. However, condos provide a more affordable entry point into desirable locations, maintenance services, shared amenities, and a sense of community.
You should carefully consider what you’re able to afford, your lifestyle preferences, and long-term goals before making a decision. By understanding the key differences and evaluating your priorities, you can make an informed choice that aligns with your needs and dreams for the home that’s right for you.
Disclaimer:
Applicant subject to credit and underwriting approval. Not all applicants will be approved for financing. Receipt of application does not represent an approval for financing or interest rate guarantee. Restrictions may apply.