By properly understanding the benefits and drawbacks of condominium life, you can make the right decision when it comes time to buy your next property.
I have owned my own home for the last 16 years. For eight of those years, I lived in a single-family home. The other eight? I lived in a high-rise condominium. I was even president of my condo association, so I got a behind-the-scenes look at how these buildings operate.
Clearly, there’s no one living arrangement that makes sense for everyone, but there are advantages and drawbacks if you decide to go condo…
- They’re often a lot cheaper. A condo is a great way to buy a first home, especially since condo prices can be even more depressed than single-family home prices. Last year, we wrote about a condo selling for less than a used car.
- Low maintenance. Owning a condo means never having to worry about many exterior issues like roofing, air conditioning and the many other things that can go wrong. While you’re still responsible for potential problems like a leaking faucet or running toilet, at least some of the stress of the stand-alone homeowner is alleviated.
- Greater amenities. Condos can feature pools, hot tubs, fitness centers, or other social facilities. Some can include storage areas and even movie rooms.
- Fewer bills to pay. As a condo resident, you can expect your monthly maintenance fee to include water, sewer, trash, and, in many cases, heating and air conditioning. Most people forget that these fees can also include insurance on the entire building, so you only need to buy a policy covering your personal possessions, not the value of your unit. My condo association even included Internet service and cable TV at no additional cost. We were able to provide these services to our residents for far less than it would’ve cost us to purchase them individually. When I lived there, I just paid my mortgage, association dues, electricity, and phone bills. Today, I pay at least a dozen bills each month.
- Heightened security. Many condos feature alarm systems and security guards. Even without these features, living in close proximity to your neighbors is inherently more secure than a single-family home.
- Pesky condo associations. Some people join these organizations because they’re bored and love to force other people to follow their rules. Be careful to avoid any condominium whose association tries to dictate every aspect of their residents’ lives. Never buy a condo without talking to people who live there – the more the better.
- Strange neighbors. I thought I was living with some great people – until my next-door neighbor decided to hold loud parties every weekend. When I knocked on his door at 2 in the morning to ask him to quiet down, I realized he had actually hired a band! Eventually, I called the police. We didn’t quite get along so well after that.
- Deadbeat residents. The economics of a condo are fairly simple. All the common bills are divided equally among all the residents, according to the size of their unit. The condo association then bills each resident for the appropriate amount. Inevitably, some residents become unwilling – or, in this economy, unable – to pay their fair share. That requires their neighbors to pick up their tab in the form of higher monthly fees or special assessments.
- Out-of-control association boards. If you have a problem with the government taxing and spending too much, wait until you have to deal with a condo association board that doesn’t know what it’s doing. Some raise rates every year to cover costs without looking for savings, while others ignore critical maintenance out of thrift or neglect. To minimize your monthly fees and to protect your investment, you have to make sure that your association is being properly run. Again, talk to existing owners.
While I’m enjoying my house in the quiet neighborhood, I miss the luxury, convenience, and (some of) my condo neighbors. Ultimately, it was our growing family’s need for more space that prompted our move to a larger, single-family home. Condos aren’t for everyone, but if you want to spend the least time worrying about your property and the most time enjoying it, buying into a well-run condominium can be a worthwhile investment.