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How to Decide: Condo or House

For many, owning real estate is the American dream. It affords you the opportunity to personalize your living space and feel connected to the community. By owning a home, you invest in the local activity, the block parties, and neighborly barbeques. You offer support to your neighbors and they, in return, offer support to you. Need a cup of sugar, dog sitter, or help with your gardening (especially advice on the age old debate: lawn gnome vs. plastic flamingo)? Take comfort in knowing that good neighbors will always be there for you. Most of all, owning real estate is a way to invest in your future. No matter where you go, your home will always give you a sense of rootedness, pride, family, and in most cases, a return on investment.

When it comes to home ownership, the two most common types of property are the condominium (aka condo) and the single family detached home (aka house). Below we will discuss the pros and cons of each.

Here are a few pros about owning a house:

1. Ability to modify the home. In most cases, you can increase your properties value by adding an additional bedroom, renovating / knocking down walls for an open concept, or turning your half bath into a full bath.

2. Freedom to decorate as you wish. You usually have the ability to decorate the exterior of the property as you wish.

3. Increase financial opportunity. You may be able to subdivide the property (if the regional zoning allows for it).

4. Larger personal space. Houses usually have a back yard that is not shared.

Here are a few cons to owning a house:

1. You are responsible for all maintenance. For example, every few years, you should perform a termite inspection and make the appropriate repairs. The exterior will need to be painted (unless you have vinyl siding). Roofs, water heaters and other items wear out over time and need to be replaced. Even if your home is brand new, you will still be responsible for cutting the grass and cleaning out the rain gutters.

2. Easements. It is possible for utility companies or even the government to place an easement on a property without your consent.

3. Larger expenses. As a house owner, there is no other household to share the expenses with.

Owning a condo can also give you a sense of pride and family without the headache of regular upkeep. In most cases, depending on the Home Owners Association, you don’t have to worry about cutting the grass, or keeping your yard free from debris, painting the exterior, plumbing repairs, termite damage and repairs and the like. The HOA does the upkeep for you. Here are a few pros about owning a condo:

1. You’ll enjoy the advantage of shared expenses. Depending on what your HOA covers, you will have little to no direct out of pocket expense for exterior maintenance costs. Any exterior costs you do have are usually shared.

2. Affordability. Because a condo typically costs less than a single family house, a condo will save you money. Also, because there are shared expenses, the overall cost will be lower than what a person would pay if there were no other owners.

3. Amenities. Many condos have swimming pools, rec rooms, barbecue pits and fitness centers. Some even have movie theaters, cooking classes, valet parking, saunas and other perks.

4. Reduced utilities. For example, your condo may cover exterior home owners insurance; water, trash, sewer, and cable. Not having to worry about budgeting for those extra expenses, makes condo living advantageous for people who like to keep it simple. In addition to making budgeting simple, the HOA will usually be able to get services discounted and the overall cost (on an individual basis) is lower.

5. Uniformity. A well maintained HOA will help your condo retain its value. You don’t have to worry about your neighbor’s curb appeal affecting your property value.

Here are a few cons about owning a condo:

1. If your condo has a HOA, you may be limited on exterior changes.

2.  With only fractional ownership of the land, your estate will be worth less than a single-family home.

3. Potentially, you will have less privacy.

4. Inability to make improvements. Usually when you own a condo, you cannot add bedrooms or subdivide the property.

In the end, it all comes down to how much time, energy, and money you plan to invest in your home and future. Do you know which option you’ll choose? That’s great. Now, it’s time to consider how you’ll finance one of life’s most important expenses. To find out how much you qualify for, begin the loan application.