Less Space and Flexibility. The rules will often be things which should make living in the condo more pleasant, like restrictions on noise and parking. Buying a Condo for Investment is Not a Great First Step . OK, maybe not never-ever.But you wouldn't be inclined to read an article entitled "You really should think about a condo carefully before buying because a lot of people get burned badly. Your location preference also plays a part. First and foremost, remember that condos are not houses. Also keep in mind that condos can be harder to sell than houses. You'll also not have any land of your own, meaning you won't have a private yard for your kids or a large garden to grow flowers. Are you thinking about buying a condo but are not sure if you should? Typically, you can expect to pay a higher rate for newer buildings with a clubhouse and plenty of amenities than you'd pay for an older building with just a swimming pool and a few utilities covered. One of the biggest downsides of owning a condominium for some people is giving up control. Bankrate: Buy a House, Condo or Town House as Your First Home? Find MA real estate agents Buying a house with land may appeal to you more if you have children or want space to work on outdoor hobbies, but you also have to consider the extra work involved. Some buildings may provide extra storage space, but this isn't the norm. Other are run by Atilla the Hun. Are you going to be happy with the lack of space and outdoor access? and Hopkinton real estate I happen to own a home, as well as two properties with an association, one of them being a villa condo. Get more helpful real estate guidance in these recently published Active Rain resources: Use these additional resources to make the best decisions in a real estate transaction. If the HOA has the wrong people in charge, you'll probably find your daily life to be a living nightmare. Unfortunately when you buy a condo, you don't own the land beneath it, but share an interest in it with the other condominium residents. You also have to consider that the required HOA fees and restrictions can turn away potential buyers in the future. special assessments for repairs or improvements, Getting an FHA loan with a condo can be a problem, How much is the commission to sell my house, PODS: What to Know About Renting a Moving Container, Problems to Look Out For With Rent to Own Homes, Are Credit Karma Scores Accurate and Useful. Why NOT To Buy A Condominium. For anybody who is thinking about purchasing a condo, this is a must read for general information and knowledge related to condo buying. Before committing to a long-distance move, you should have these considerations figured out. QuickenLoans: Condos: Pros and Cons for First Time Buyers. Fair Housing: Some of the reasons why you should not pursue a condominium may cause you to re-think your decision. One of the main reasons people buy a house over becoming condo owners is the uncertainty of homeowners association fees. Often, condos lack much, if any, outside space. If you don't like the rules, guess what - that's too bad! This will help you choose a complex with an affordable HOA fee and avoid paying for perks you won't use. What's the reason you're reporting this blog entry? Condo communities may offer amenities and common areas (e.g., pools, a garage, or tennis courts) that you may not otherwise be able to afford if purchasing a townhouse or standalone house. Another one of the reasons not to buy a condo is that you have less space and flexibility in how you use your place. Moe Doiron/The Globe and Mail. Common are restrictions on pets and on renting out your unit. Other places featuring her business writing include JobHero, LoveToKnow, Bizfluent, Chron and Study.com. The prospect of purchasing a condo can seem like an excellent idea for many people. © 2021 ActiveRain, Inc. All Rights Reserved Fair Housing and Equal Let's take a look at some of the issues you need to consider before the buying condominium option is chosen. The concept of supply and demand plays a factor into this since more buyers may want a place that has actual land, so you'll see standalone home prices go up more quickly than your condo. Why Not to Buy a Condo. Condo Association Rules: These can be the pits. For example, it’s not uncommon for the condo’s homeowner’s association to limit the amount of people allowed to visit by only allowing a certain amount of parking spots. If none of these things seems like a problem to you, just make sure you do all the necessary due diligence before making a commitment. 39. Is Condo Buying the Right Choice for You? However, your HOA may need to charge you an additional fee called an assessment if your building needs a major repair that exhausts the reserve funds. If you’re thinking of buying a condo, there are lots of reasons why it might be a smart move right now. Many people that join these boards have nothing better to do with their life than make overbearing rules that make others miserable. While a condo may cost less than a house upfront, you have to factor in the monthly homeowners association fee that you'll usually have to pay for as long as you own the place. Open this photo in gallery: Construction on a high rise condo building along Toronto's waterfront in 2012. For example, HOAs commonly ban home-based businesses, so if you work from home or have clients visit you, then you'd likely have problems if you moved into a condo. There will be building insurance included in this, and it could also sometimes cover heat and electricity as well as other expenses. Condominium living often means close proximity to your neighbors. NEVER buy a condominium! You'll find that HOA fees, proximity to neighbors and available space vary by type of condo, so researching and visiting multiple buildings in the area can help you narrow down your options. When you own a condominium there are a couple of ways that can happen. If you are unable to keep paying these monthly HOA fees, you could find yourself facing eviction even though you own the home. Possible Cons of Buying a Condo. "You don't choose who your neighbors are. Dealing with unbearable noise is another significant reason not to buy a condo. Still, it does come with many potential problems that you need to think about. Living in a condo also means you have to pay more attention to how much noise you make, so playing a musical instrument late at night or turning your TV up loudly might get you complaints from those living around you. The Pros Didn’t Outweigh the Cons. on ActiveRain. 101 Reasons Not to Buy a Condo delves into situations related to condo life that the average person is unaware of. Don’t buy a condo because it’s “what you should do next.” Instead, really think about whether it’s the right decision for you and your spouse. You have the advantage of less maintenance to do on the home and more facilities, but there can be downsides. If you've always dreamed of owning a vacation home, you're not alone. that are written by the members of this community. More importantly, there will be no option to make an addition to your property. We … If you want to live in a busy downtown area, you'll likely find condos more readily available. Whether you are shopping for your first place or are planning to downsize from an existing property, your lifestyle plays a large impact on whether a condo or house is right for you. As with most things in life, there are pros and cons to owning a condo. You can get a mortgage for a condo, but there could be some issues. While this will be fine for many, it could mean you have to make some difficult choices when it comes to your furniture and possessions. One of the main reasons condos produce problems is due to rogue condominium boards. "And besides, that title is too long. If you get a bad one, you're stuck with them for a long period of time. How These Dues Make Homeownership Easier Than Ever, Buildium: What You Should Know About In-Home Businesses in Your Community Association, {'url': 'https://www.moneyunder30.com/condo-financing-is-different', '_id': 'https://www.moneyunder30.com/condo-financing-is-different', 'external_url': 'https://www.moneyunder30.com/condo-financing-is-different'}, Rochester Real Estate Blog: 10 Tips for Buying Your First Condo. You'll have to make a down payment to finance a home purchase unless you qualify for a VA loan or one of a few first-time homebuyer programs. Reasons not to buy a condo in Metro Manila anymore-Buyers are mostly either OFWs or Chinese Main landers-Most buyers are just speculators, investors, or POGOs The HOA will mandate that you follow their practices as well as paying their monthly fees. Before you purchase a condo, it's important to take a detailed look at all relevant rules and regulations, with documents available directly from the Condo Board. Clearly there are some advantages of buying a condo but for the average America a cost benefit analysis will weigh out the purchase of a condo. ActiveRain, Inc. takes no responsibility for the content in these profiles, As you can tell from the title, we’ve come to a decision and have decided not to buy a beach front condo. You can brag to homebuyers about your spacious bedrooms or all the amenities in … The conversation isn't about, "buy a single family home or invest." This truth about Condominiums! You may also find it takes longer to sell your condo. make an informed decision when buying or selling a house. Reasons Not to Buy an Orange Beach Condo Jeff Nelson, 02/20/2019 There is so much real estate activity in the Orange Beach condo market that I thought it would be a … When you're shopping for a new place to live, a condo can seem like an appealing and more affordable choice than a single-family home. If you have a lot of possessions and are moving from a larger home, you will have to make some cutbacks to the things you bring with you. If the condo association allows too many rental properties, they could also make it problematic for new buyers to get financing. When you buy a condo, you are only purchasing the space inside the inner walls of the structure. No Land Ownership. Understanding typical association rules are vital in order to figure out whether you will be able to handle condo living or not. Over my thirty plus years working as a real estate agent, I have heard tons of complaints from people who never realized how much they missed living a home where they were king of the castle. Mortgage Issues You can get a mortgage for a condo, but there could be some issues. As a result, condos are in high demand and appreciating faster than single-family homes. This fee can cover your water and trash usage, landscaping and snow removal, upkeep of amenities like pools and tennis courts, building insurance and maintenance of the common areas. If you prefer a quieter suburban area, you have plenty of options for houses and can also find condo complexes in most neighborhoods. His work has been featured on RIS Media, National Association of Realtors, Inman News, Placester, RESAAS, Credit Sesame and others. Reviewed by: Alicia Bodine, Certified Ramsey Solutions Master Financial Coach. Posted by 1 year ago. Getting an FHA loan with a condo can be a problem. Financially we’d be perfectly fine buying and permanently living in a beach front condo and renting out our town house. Hopefully, this review of why you may not want to buy a condo has opened up your mind. Most condos are run by associations that make the rules that owners must abide by. Condos have never been more popular, particularly with the aging Baby Boomer population, which is starting to downsize and move into homes that are easier to care for. You shouldn't think about it as a doom and gloom situation but more of a research project. This could result in you having to lower the selling price of your condo to get more interest from buyers. Close. There are pros to buying a condo as well. While less space means you have less to clean, it is a downside if you have a lot of stuff. Investors should also keep in mind that the HOA fees and assessments can take a large piece out of any profit made over the time of ownership. I hope you have a great day. Not doing so can be extremely shortsighted as it severely restricts the number of buyers who will be able to purchase. Thanks to all this, condominiums don't tend to increase in value as fast as normal homes. This means a condo unit owner does not have the freedom to choose how their properties look. Another one of the reasons not to buy a condo is that you have less space and flexibility in how you use your place. For some people, a condo can be a godsend, while for others, they can turn into a complete nightmare. Here are four reasons why condos are usually a bad buy: Rogue Condo Boards. Lenders will look at factors like insurance coverage and non-payment of HOA fees in your building when assessing your eligibility. It will be essential to check on how well the party wall is insulated. Condo Governance: Some associations are super chill. If you've decided a condo works for you, it's recommended to consult with a real estate agent to find one that fits your needs. Great information, thanks for sharing. The most fool-hardy decisions are made in haste. While you can usually get a mortgage for a condo, you might run into some snags along the way, especially if you want a Federal Housing Administration loan. Lean on your real estate agent to find out all the answers to your questions before putting up your down payment. Buying a condo now, and renting it out in the meantime You can generally buy a property you intend to rent out with at least a 20% down payment and borrowing up … For those that hate mowing the lawn, pulling weeds, repainting the house, or doing other chores associated with homeownership, it simply makes more sense to buy a condo. MoneyCrashers: Pros & Cons of Buying a Condo – Is It Worth It? 7 Reasons Why Buying a Vacation Home Is No Holiday | realtor.com… Buying a condo for investment is a tricky subject and you will find many conflicting answers on the topic. The most significant being they are not right for everyone. Again, sometimes the association is too foolish to spend the money to get the neighborhood FHA approval. Do the monthly HOA fees seem reasonable, and are the rules they place on the complex right for you? Condos are usually less expensive than single-family homes and have lower maintenance requirements, making them good options for homebuyers on a … He enjoys providing helpful information to buyers, sellers and fellow real estate agents to make sound decisions. It can range from just 3.5% of the sales price for an FHA loan to a minimum of 10% for a conventional loan. One of the substantial differences between homes and condos is a home's uniqueness. These rules often contain common-sense restrictions like avoiding loud noise, taking care of the common space and only using up a few parking spaces. Often they will include tennis courts, swimming pools, a gym and other amenities you might not be able to afford on your own. These are the ones people regret later on when it is too late. This is especially true if you are looking to purchase in a sought after location or somewhere with a lot of amenities for the owner. Even if you choose a conventional home loan, factors like the complex's HOA delinquencies, insurance coverage and covenants can affect whether you can get a loan. Depending on the building, its amenities and your location, you may pay anywhere from $100 to thousands of dollars a month in HOA fees, according to Realtor.com. But they can also dictate minor details such as what color of curtains you may use in your front windows or whether you can hang that Christmas wreath on your door. When you come to sell your home, the choice of condo living could present more problems. Are you sure you want to report this blog entry as spam? If you are unlucky, you will find yourself with a neighbor who plays loud music or has frequent marital arguments. You may end up having to price your condo lower to attract buyers and make up for the ongoing costs of ownership. Living, owning, buying or renting a Condo and why it sucks to live in a condominium... From my experience. There are reasons why you should not buy a condo. If you want to rent part of your unit out to a friend or someone from Airbnb, your HOA rules may not allow it. A condominium could offer an exceptional living experience for you. You will be stuck with what you buy. To qualify for an FHA loan, your condo must be on an approved list, have a majority of the units occupied by owners and be your principal residence, among other requirements. If your development isn't on their approved list, you won't qualify. This could make living in your home unpleasant or restrictive on your life. Fees Ashley Donohoe has written about business and technology topics since 2010. With fewer maintenance responsibilities, there is a cost; you can expect to pay monthly to the homeowners association. Understanding the pros and cons of investing in condos and living in them can help you make an informed real estate purchase decision. There are likely to be many other very similar properties available, too, meaning that demand isn't going to improve the value of your home either. Like with an apartment, many condos have shared walls, meaning you are closer to your neighbors and have less privacy and quietness. One of the best tips for buying a condo is understanding how they are different than owning a single-family home right up-front. When choosing a real estate investment, buyers are looking at investing on a property that promises a high return of investment, and a condominium may not be the best option for that. Some condos offer owners extra storage space or possibly a basement, but you'll still likely have a smaller, more compact living environment than you would in a house. They call this situation being warrantable. One of the biggest reasons that so many people are looking to buy a condo is the fact that they do not require the same type of upkeep as owning a house. Opportunity, Real Estate Agent with RE/MAX Executive Realty 91362, You must sign in or register to leave a comment. Five reasons not to buy a Toronto condo. Older condominiums typically do not have the same sound protection as newer units. After all, condos often come with a lower price, offer several amenities and require you to do less maintenance work. A condominium is a housing unit in a building where other homes may be beside, below and above a single unit. Condos do often have a balcony or small porch area where you can put a few plants, grill out and sit outside, but you're still bound to HOA rules in what you do in that area. Reasons not to buy a condo in Metro Manila anymore. Part of your HOA fees typically goes to a reserve fund used for major repairs like roof replacement. This can be an issue if you have disruptive neighbors that you do not get along with or if you live next to someone whose dog barks constantly. Archived. But seriously, you should think long and hard before buying a Condo. You could find yourself in a situation that is very problematic. It is vital to know before committing to purchase if there are going to be any substantial outlays shortly. Location plays an important role in your home buying choice. One of the popular reasons not to buy a condo is that you have to agree to follow numerous rules that your HOA sets. Choosing to buy a condo usually also restricts the space and flexibility the home will offer to you. If you are looking for a mortgage from another lender, there could still be problems. 101 Reasons Not to Buy a Condo will take you through all of the shortcomings present in the market of condo ownership. However, reasons not to buy a condo range from additional costs and rules to less privacy and space. Lastly, know the amenities and services that are most important to you, such as a swimming pool, 24/7 maintenance, included utilities and covered parking. Where fees can really add up is when there are special assessments for repairs or improvements that may be needed throughout the neighborhood, such as replacing all the roofs or decks throughout the complex.