Home ownership is a very individual idea. Whether it’s a cabin in the woods, a lakeside cottage, a high-rise condo with a city skyline view, a renovated industrial loft in a trendy urban neighborhood or a suburban ranch with a playground just down the street, each style of home is somebody’s special dream. It might be new or in need of updating, simple or grand, but owning a home is still the prevailing American aspiration for a majority of people.
Even though home ownership numbers are down from their peak of about 50 years ago, home sales in actual numbers are trending up again following the recent recession. If you’re looking for a home today, there are a lot of options.
If your option is between a single family home in a traditional neighborhood or a condominium development, the options might not be as clear-cut as you would think.
When condos were first introduced, they were often sold as second homes in vacation destinations or as the perfect option for retirees looking for an easy lifestyle with minimal maintenance needs. Some of those early condos got a bad rap. Today, however, buying a condo can be a smart move. Also, today, condominiums are not confined to urban high rise buildings, nor are they exclusively for empty nesters and aging Baby Boomers.
In the past, it was the condominium associations and restrictive covenants that were both the main advantage and the primary obstacle, depending on a particular point of view. Condo exteriors and common facilities were (and are still) almost always maintained by an association, which also sets fees and, in effect, manages the property – meaning that if it comes time to sell, sellers won’t have to worry about things like curb appeal and exterior maintenance. However, every owner has a voice in the governance of the condominium.
Today, many single-family subdivisions also have pools and clubhouses, golf courses, green spaces, dedicated streets and other amenities that are managed and maintained by associations. Sometimes the fees and rules are every bit as expensive and restrictive as they are for condominium owners.
The legality of property ownership differs between condos and single-family homes, so it is important to know the meaning of terms like “fee-simple” ownership and “undivided interest” in common property. The basic difference, in elementary terms, is that owners of single-family homes usually hold a deed on both the land and the structure. Condo owners have little control individually except over the interior of their unit, and the value of any condominium depends in large part on the attractiveness, the reputation and the management of the entire complex.
Fees and assessments vary considerably from one condo community to another. Prospective buyers should always read and understand association documents prior to closing on a property that is subject to monthly fees and annual assessments. A well managed association plans ahead and keeps ample funds in reserve for repair and upkeep of common property. However, there can be unexpected assessments for extraordinary expenses. They are sometimes very expensive. Although membership is sometimes voluntary for single-family homeowners, an association gives owners a voice in the management of the community; some owners view this as a plus.
Urban condos are enjoying new popularity in cities as diverse as Miami, Florida; Boston, Massachusetts; Minneapolis, Minnesota; Denver, Colorado; and Austin, Texas, and often are the choice of young professionals as well as seniors who enjoy the services and the amenities offered and the proximity to the urban core.
Although moderately priced condos may be slightly harder to resell than comparably priced single-family homes, the decision about which to buy is still an individual one. Explore all the differences, and base your decision on realistic comparisons rather than on “book value” or “star quality.”