Why condominiums are a good choice for first-time homebuyers
When it comes to buying a home, you have many decisions to make — where do you want to live, what type of loan you want to apply for and what kind of home you see yourself in? Maybe you want a big, solitary house in the country, a townhouse in a private community, a small single-family starter home or a vacation home.
Just remember, those aren't the only options. Condos can be vibrant, easy to maintain and fun places to live — and they make solid investment properties. That's because the condo market is on an upswing, especially as the pandemic has afforded so many people to work from home while living just about anywhere in the country. And many of those people — former apartment dwellers — have found that the non-condo housing inventory is severely lacking. Considering condominiums in cities and suburbs can increase your housing options dramatically.
Here are five reasons we think buying a condo is a good idea. See if you agree!
- Condos may put less of a dent in your wallet
Discounting condos in sought-after big cities (think NYC, Los Angeles, Boston), condos in smaller cities like Charlotte, Dallas, Denver and Nashville can be more affordable for first-time homebuyers. In plenty of areas, a condo is priced slightly lower than a single-family home and can often offer just as much living space.
A lower purchase price means you'll have to borrow less, which allows you to apply for a mortgage with a slightly lower credit score. It also means that your loan payments will be smaller every month. Best of all, with a lower purchase price, you won't need to save as much for a down payment; if you are approved for a loan, you might be able to put the wheels in motion a lot sooner.
- Condos come with (mostly) built-in maintenance
Most condominium communities will have special fees that support the requirements of an HOA — or Homeowners Association. This is typically an elected group that governs the condo complex. HOA rules can range from very silly (like how gaudy you can decorate the front door to your unit) to very restrictive (some communities require all vehicles to be parked in a garage). Because HOA fees can run from inexpensive to over the top, it's good to review them before making an offer on a condo.
In most cases, though, HOA fees allow the association to handle all the common areas of the condo complex — like keeping hallways and elevators clean — and large items like roof maintenance and property landscaping.
Having someone else handle the workload — and the hiring and firing of contractors — rather than you as the homeowner taking it on can be a massive relief. It's almost like having a superintendent of a rental apartment building!
- Condos let you live your authentic self
Don't confuse a condominium complex with an apartment building. They may look the same, but you own a condo. That means you don't need a landlord's permission to paint your interior walls, make minor home improvements or remodel the kitchen — as long as you respect the aforementioned HOA rules, like not making noise after 10 pm. The CC&Rs (covenants, conditions and restrictions) of your HOA documents will tell you what is and is not allowed.
Because they are smaller than single-family homes, decorating condos can be tricky since there's less space to work with. But there's also less to buy (no lawnmowers, for example), so you'll be able to spend on quality furniture, lighting and appliances if you so desire.
Condo ownership gives you much more control than you ever had as a renter. As a first-time homeowner, this may be the first time you've had the freedom to decorate however you wish and be your true authentic self — within the four walls of your unit. So go for it!
- Condos have more modern amenities than ever before
While condo communities often have amenities and common areas similar to those you'd find at an apartment complex, things are changing.
Condos generally offer amenities that you pay for via your HOA payment. Typically they might include a swimming pool, tennis courts, dog park, clubhouse, bike storage, workout rooms, children's playground, programmed recreational activities and beautifully landscaped green space. You're not likely to find these amenities in a single-family home situation unless you map it all out yourself (and foot the bill).
However, with more discerning city dwellers moving to the suburbs or smaller urban areas, condo boards everywhere are looking to add amenities that will make their buildings more attractive to buyers – and make the units more valuable.
Some first-time buyers who may not utilize (or even care about) all the amenities will still consider them in their purchase as they know that having more to offer will make it easier to sell when the time comes. Others may choose a condo with perks that they may not be interested in now but will find more desirable as they get older and use the condo as a vacation destination or a downsized retirement space.
- Condos can be really smart investments
While you're looking at a condo as your primary residence today, consider that they're also great as real estate investments.
After living there for as long as you wish to, you can choose to sell your condo or add to your income stream by turning it into a rental property. Check the rules and regulations in your HOA docs to make sure that owners are allowed to rent their condo units out. Some forbid it, while some others have limits on the length of time you can rent for.
For example, some HOAs are fine with long-term, one-year leases but don't allow short rentals (days, weeks, months), like the kind offered with Airbnb or VRBO. These short-stay rentals are often too disruptive to other full-time dwellers, and, unfortunately, horror stories are all too common concerning noise, damage, etc.
If your HOA allows rentals, remember to factor in the monthly HOA fees and annual taxes you'll still pay even while your condo is vacant. Your accountant will help you go over the pros and cons and decide how the expenses and the added income will work in your situation.
Let's talk condos!
Movement Mortgage loan officers can chat with you to discuss first-time homebuyer programs with exceptional rates and low-to-no down payment for qualified borrowers.
We even have specialized condo loans available. Contact a local loan officer to see what it'll take to get you into the condo of your dreams.
