Buying a Condo or a House: Which Should You Consider?
The current housing market is tight and getting tighter. Inventories are low, particularly in densely populated areas favored by young professionals. Buyers may feel pressure to act quickly if they want to snap up a desirable home. Before you begin looking at properties, though, take time to weigh the pros and cons and decide if you're interested in buying a condo or a house.
What's the Difference?
Houses are typically standalone structures, and you're responsible for maintaining the entire property. You may outsource those tasks to someone else, but you'll shoulder the duties of hiring, managing, and paying them.
A condominium (condo) is a single unit that's part of a larger building. So, you'll be one of several owners in the same building, but your living space will be entirely distinct from theirs. Unlike in a house, a condo board will handle grounds keeping, and the cost of maintenance will be covered by your homeowners association (HOA) fees or condo dues. Depending on the type of condo community you live in, ownership may include common areas for use such as pools, fitness centers, rooftops, and picnic areas.
The Pros and Cons of a House
In some respects, owning a house carries more responsibility. The property is yours, so it's up to you to take care of it and proactively improve upon it. However, owning a home means that it's entirely yours; you can update it as you see fit. Homeownership also provides stability and a sense of pride — you have a place you can call your own at a rate you can budget for long-term. To determine how much house you can afford and which mortgage is right for you, contact your mortgage loan officer.
Buying a house is a big investment — be sure to speak with your financial advisor or loan officer to ensure that your decision aligns with your financial wellness goals. The rate you'll get for the house depends largely on the market and the broader economic environment, so it's important to know how it fits into your overall financial picture.
The Pros and Cons of a Condo
With a condo, you'll enjoy some of the same perks of homeownership as you would with a house. You'll still have the joy of owning your own place and depending on the type of mortgage you take out you can create financial stability and plan around your monthly payments. You'll also get to revel in those benefits hassle-free since you won't need to worry about trimming overgrown trees or clearing a path outside your door post-blizzard.
However, you may accrue less equity with a condo. At least, it's likely to appreciate more slowly, so you may have less borrowing power if you decide to apply for a home equity loan or home equity line of credit. You could also be subject to the condo community's regulations on how you use your space, not to mention find yourself on the hook for major maintenance expenses that aren't covered by your condo dues. Speaking of dues, you'll want to calculate the monthly cost and find out exactly what's covered before you commit to a condo.
Making the Decision
Before reaching a verdict on your own about buying a condo or a house, think carefully about your long-term goals and your personality. If you crave freedom and like being able to implement your own ideas on a whim, you may want to narrow your search to houses. Same goes if you have ideas about building additions as your family expands or to accommodate a particular hobby.
But if you're comfortable with living in close proximity to your neighbors and want access to plenty of amenities without having to do much upkeep on your own, a condo may be the way to go. The important thing is to know what type of environment you thrive in and hone in on the option that matches that profile.