Should You Buy a Condo as Your First Home?

Oct 07, 2023 By Susan Kelly

Condos, or condominiums, are similar to apartments in that they are individual dwelling units within larger residential complexes with shared common facilities.

Though condos have several advantages over apartments, townhouses, and single family homes (houses), they also have some disadvantages. Let's dissect the definition of a condominium and weigh the benefits and drawbacks of condo ownership.

What Exactly Is a Condos?

A condominium, or "condo," is a type of multifamily dwelling attached to at least one other dwelling unit located inside a larger residential complex.

Condominium projects are similar to apartment buildings in that there are usually many units occupied by individuals who are very near to one another and share standard amenities. Gyms, pools, playgrounds, tennis courts, and other recreational facilities are commonplace in communal spaces. On the other hand, condos can be leased or bought, whereas flats only offer rental.

Styles of Condos

Condominiums for sale will most likely include a selection of floorplans. Most condos fall into one of these categories

Townhouse-style condominiums: Structures that house only one family, with individual doors to each unit

apartments complexes: An apartment complex with no more than two stories and two or fewer units per building or a building with five or more units and no more than two stories.

Luxury apartments in a high-rise building: Apartment communities consisting of three or more attached buildings, each with five apartments or more

Whether you want a large or small structure with many or few apartments, numerous stories, or no floors, it will determine the best condo for you.

Disadvantages and Advantages of Condo Living

Pros

Security \Affordability

A location that is highly sought after

Easily maintained

Activities and entertainment available right on site

The advantages of belonging to a group

Cons

The walls, floors, and ceilings are all shared.

Association dues

Management and leadership aren't on the same page

Minimal available real estate

Guidelines for Securing Condominium Financing

Condo financing is feasible but could be more complex than a single-family home. Your condo's worth is tied to the overall condo complex's success and stability, which is a small but vital part. 45

It is common for lenders and loan backers to conduct a full-scale condo complex assessment. For Federal Housing Administration (FHA) financing, the United States Department of Housing and Urban Development (HUD) has strict guidelines that condos must follow.

Projects must be at least 75% residential.

A minimum of 75% of the units in a project must be dedicated to residential use.

For the development to proceed, at least 51% of the dwellings must be occupied by their owners.

At the time of approval, developers may possess up to 49% of the total units.

For insurance premiums and deductibles, sufficient resources are required.

Condos can be financed through the Federal Housing Administration (FHA), the Veterans Administration (VA), the United States Department of Agriculture (USDA), or through a conventional loan, provided the condo development satisfies the criteria for each loan type.

Should You Buy a Condo for Your First Home?

A condo may be the perfect option if you're ready to buy your first home but need more time to be prepared for a house and land commitment.

Is a minimum number of years required for a condo before you consider buying it?

Condominium ownership is a significant financial decision that involves many factors, including age. In regards to condos, there is no one perfect age for occupants. A few years old, condos may require less extensive repairs, but you should evaluate the building's stability. Make sure the financing is available, the value holds up, the amenities suit your needs, the regulations and fees are manageable, and the area is a good fit for your lifestyle.

When comparing condos and townhouses, what are the key distinctions?

Owners of condominiums have sole title to the space immediately within their units, but joint title to the shared exterior spaces is held jointly with other condo buyers. It is common practice for a buyer of a townhouse to take title to the entire unit, including the land on which the townhouse stands and the home's interior and exterior. In most cases, a homeowners' organization will have title to the shared areas between townhomes, meaning individual residents will not have any say in the upkeep of these areas.

Which condo owner is responsible for fixing the leaky pipes?

Who pays to fix leaky pipes in your condo's walls depends on state law and your association's bylaws. To cover themselves in the event of plumbing problems or leaks, condo owners typically get HO-6 insurance. However, the HOA will generally take care of the common areas' plumbing and any problems that emerge that aren't the fault of individual residents.

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