Top Three Reasons You Should Buy a House Instead of a Condo
by Dino Alexander, REALTOR®, Real Estate Editor, Hudson Valley Style Magazine
Condos are very tempting properties to buy, especially if you’re in the market for the first time. They are frequently cheaper than houses. The low monthly payment for amenities is also attractive for people with busy lifestyles. There’s also a perception that condos can be used to temporarily build up equity until you’re ready to move into a proper home. Although there is truth to each of those statements, the reality is that many people simply outgrow their condos. Sharing a building is not always easy. Even if your current homeowner’s association board is excellent, that might not be the case 10 years from now. The same goes for the HOA dues. What you’re paying when you purchase the unit is not what you’ll be paying forever. As people grow with families and careers, living in a condo begins to make less sense. If you’re considering buying a condo instead of a home, consider these three reasons why you might want to re-think that purchase.
Homes Have Stability
Condos have a myth of stability. People who promote condos will often talk about how the HOA will take care of significant unexpected expenses. For example, if your roof leaks, you’re not the one paying for it since the HOA will take care of it. By contrast, if you owned a home, you’d be responsible for the entire cost out of pocket. While the HOA will take care of these types of problems, residents are collectively paying for the repairs through their dues. In theory, the monthly payments would be set such that there was a reserve fund. However, if there isn’t enough money for the repairs or if the board has no desire to tap the reserve fund, condos have the authority to levy special assessments. If you don’t pay the assessments, condos can put a lien on your property and generally have the right to foreclose.
As a hypothetical example, suppose a thunderstorm damaged the roof. The condo association hires someone that you think is charging an egregious amount of money. You also feel the repair needn’t be done immediately. The residents all vote and most agree on the work and the corresponding $10,000 assessment per unit. Maybe you were just laid off, and as such you don’t have $10,000 to pay. The condo puts a lien on your property and can begin to initiate foreclosure proceedings to pay it off.
With a house, you are in full control of when you do the repair and how. You can even repair the damage yourself to save money. And the only way you can get a lien on your property is if you have a mortgage, home equity line of credit (HELOC), or if you fail to pay your property tax bill. In theory, the costs of a house are higher than a condo. However, you have much more control over when and how you spend money on home maintenance.
Homes Usually Have Expansion Room
The space that you buy with a condo is typically fixed. With a house, you’re also buying land to go with the property. If you have a back yard or an unconverted garage, you have expansion room if you find the house getting too small. Depending on your location, adding extra square feet to your existing home can be significantly cheaper than selling your existing home and upgrading to a new one. By contrast, condos are either structurally fixed or have bylaws prohibiting expansion. The only option to increase your living space is usually to sell the condo and purchase another residence.
Houses Are Faster And Easier To Sell
Buying a property is sometimes easier than getting out of it. Homes typically have faster closing times for lenders, and they usually have lower interest rates. Lenders also need to see copies of the bylaws to make sure there’s not problematic legalese in them. This means that condos typically have a more challenging closing process than homes. While you may have purchased the unit and been willing to go through that, the increased scrutiny can be a turn-off for other buyers. Worse, if your HOA declares bankruptcy or something else happens that makes lenders wary of your association, it means that future buyers may be unable to obtain a mortgage to purchase your property. As you might imagine, that will send your resale value into a tailspin. You might even be unable to find a buyer to take over your property. While that worst-case scenario is improbable, it’s also not impossible. By contrast, unless there is something structurally very wrong with the home, lenders are almost always able to provide mortgages for houses at better rates. This means you’ll be able to find a buyer if you ever want to move.
Buying a condo often appears to be a smart decision at first glance. While condos do have a lot of benefits, they also have a lot of potential drawbacks that could ruin the experience. The unpredictability of the HOA, the lack of expansion room, and the possible future difficulty in leaving the condo are all potential pitfalls to consider. Homes do not have those problems. With a house, you have complete control over when and how to do maintenance. You can elect to expand instead of buying a new property. A home is always quicker to sell. Typically, if you can afford to purchase a home, it’s usually a smarter decision in the long run than opting for a condo.
Whether you are buying a single family home or a condo – the choice is yours! Alexander Maxwell Realty is the premier real estate agency in the Hudson Valley and can help you to navigate the local market and find your new dream home. At Alexander Maxwell Realty, we combine the very best in real estate marketing and go beyond the scope in order to encapsulate and combine it with the various service elements that are a necessary part of an ultimate service delivery mechanism. We don’t just sell the best Hudson Valley locations in luxury residential properties but also go a step further and bring our expertise in real estate investment, interior design, real estate marketing, home staging, renovations & remodeling, landscape design and much more along with us.
Dino Alexander, Principal Broker, Alexander Maxwell Realty
309 Wall St., Ste. 1, Kingston, NY 12401