The Pros and Cons of Owning a Condominium
A condominium, condo for short, is basically an apartment that you own. It is usually cheaper to own a condo than a house because you only own a piece of a structure that is shared with your neighbors, rather than a house all on its own. When you own a condo, you only own what is inside your actual residence, such as the interior walls, ceilings, and floors. Everything else that is part of the exterior structure like the roof, walls, foundation, and any amenities included like a pool, or clubhouse you jointly share in the ownership with your neighbors. There are many hidden costs and restrictions that you should be aware of before investing in a condo. These are just a few..
Generally speaking, condos are associated with older people. Retired seniors are the ones who are the most attracted to what the condo can offer. Remember the American dream of retiring and moving to Florida to buy a condo and live out the rest of your days on the beach? Yeah that's the one. A condo can be the place between retirement and death. That is not always the case though. In urban areas, many younger single people own condos because that's more practical for them than renting or buying a house. Condos are better suited for people who are either young professionals with no families or older seniors that just want to live what's left of their lives in peace surrounded by other seniors.
An advantage of owning a condo is that you are not responsible for taking care of any lawn work like mowing, raking leaves, or shoveling snow. But this benefit is not for free. You have to pay a monthly condo fee to the Condo Association for these privileges and any other fees for amenities you use such as a pool, clubhouse, or tennis court. The Condo Association also uses these fees if any repair is necessary on the exterior property such as new windows in the hallways, new carpet, cleaning services, roof repair, and any other issues. They have the right to increase condo fees as they see fit. The Condo Association also has the right to deny you many privileges such as having pets in the building, smoking, and even putting up a satellite TV such as DISH because it is part of the exterior structure and could mess up the outside view. Remember you don't have a say about the exterior because you're only a part owner with all your other neighbors.
The Condo Association is known to hold meetings as an attempt at democracy if someone wants a privilege that they don't agree on. So if you want to own a dog, but the Condo Association policy says no dogs over 30 pounds and yours is 40, this could be put up to a vote and if your neighbors vote okay, then your dog will be allowed to live in the building with you. It's a way to show that you have a voice, although you will likely find out that most of the people in the building are like minded individuals. They don't want pets in the building because pets equal noise and a mess to their meticulously manicured grounds.
A condo is not the right living environment for a family with young children and pets. Children need a yard to run around and play in and most condos don't provide that. Depending on what type of condo you live in, you might get a small area big enough for a deck but that's about it. You can forget about having a fenced in yard or any sort of garden because you share the exterior grounds with everyone else and they tend to be nosy. Plus children and pets make a lot of noise which is unwanted in a condo complex that is full of seniors who prefer the peace and quiet. Most condos are very much like nursing homes without the medical staff present. It's almost too quiet and that's just the way they like it.
Another thing that many people don't realize about condos is that you have to pay property taxes on them like you would on a regular house. You don't actually own any property because you're basically living in a glorified apartment building, yet you have to pay for it like you do. If you didn't get a great interest rate when buying your condo, you might want to consider refinancing, but in many instances you can't. From personal experience, I was not able to refinance my condo because it didn't qualify as property. Yet, I was paying property taxes every year like it was. In my humble opinion, there's something wrong with that.
So what happens if you own a condo and your washer and dryer breaks? Well, since it's inside your walls, it's your responsibility to fix them. The same goes for your windows, floors, plumbing, electric, and any other things that go wrong inside your condo. You're responsible for absolutely everything. But let's say you want to plant some flowers or even a small tree in your designated area outside. You have to ask the Condo Association for permission because that might ruin the view of the exterior of the building thus decreasing property values. You pay for this property, but you don't really have a say in how it looks.
Another time your condo might not be considered property is when you want to take out a loan from the bank and they ask you if you have collateral so they feel more comfortable in taking a risk on you. Well, you might say of course I do, I have a condo. Nope, that doesn't count. I don't know about other states, but in Illinois a condo doesn't count as collateral or as property. If you did own "real" property like a house you would get that loan at a lower percent interest, but since you only own a condo and that doesn't qualify, you will get that same loan but at a much higher interest rate. Thanks condos.
If you're really set on owning property, you might want to wait until you can buy a real house. Condos might seem like a great compromise between an apartment and a house, but they're really not. You're paying property taxes like you own a house without any of the benefits of actually having a house. In a condo, you give up a lot of privileges like privacy. You still have someone living on every side of you that you have to share a wall with. You might also have a loud upstairs neighbor that makes your ceilings shake every time they walk. If they turn their music up too loud, you're going to hear it. If they slam some doors, you will hear it too. You're surrounded on every side so get used to not having any privacy, but paying your money like you do.
If you do own a condo, but then come to your senses and realize you're not about that life, you might think it's no problem and put it up for sale. Good luck with that. The market for a condo right now is very slim. It seems like people are becoming smarter and not buying condos like they used to. The values of a condo have gone down dramatically. In my area, there were luxury condos that used to be $200,000 and a few years later they are now down to $99,000. That's a lot of money to lose if you're the one selling. Most people hope to make a new bucks or at least get their money back when they sell, but don't expect that with a condo. You will more than likely have to go way lower than your asking price because people will simply not want to pay that much for a property that doesn't live up to its hype.
When it comes down to it, only you can decide if a condo is right for you. I know that it varies by the type of location you live in so you might get lucky and find a condo that fits your needs. All in all, you will never be lonely in a condo so if a "community" type feeling is what you're looking for, a condo might be for you. You will never feel alone because that neighbor from downstairs will be over soon to ask just what you think you are doing making all that noise up there. But that's only if the Condo Association doesn't come knocking first because that plant on your deck is not their idea of classy and property values will sink. The jokes on them though, because condo property values can't get any lower.
Have you ever owned a condo?
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