A condo can be a highly affordable option for home ownership, but owning one is a little different from owning a stand-alone single family home. 

Condos even come with special loans known as condo mortgage loans that account for these differences. 

See also: How Does a Condo Mortgage Work? A Complete Guide for Buyers

Understanding the Difference Between a Condo and a House

A condo is normally a single unit in a building full of other units. When you purchase a condo, you gain ownership of everything inside the unit, but don’t gain ownership of the overall building the unit is housed in, nor the ownership of the land the condo sits upon. 

Condos tend to be smaller than stand-alone homes. In fact, most resemble apartments in their overall floor plan and layout. 

When you purchase a house, you’re responsible for the building and the land as well as the home’s interior. When you purchase a condo, the roof, building structure, and land are all the condo association’s responsibility, though you will often pay fees into a Homeowner’s Association to cover some of those costs. 

Understanding the Difference Between Buying a Condo and Renting an Apartment

When you buy a condo, the unit is yours. You may paint the walls, replace the cabinets, and update your water heater if you want to. You’ll pay your mortgage rather than paying rent, and you’ll build equity in a condo just as if you were paying a mortgage on a single family home. You’ll enjoy the same mortgage interest tax benefits as a single-family home owner would. 

You’ll be responsible for the interior maintenance of the condo, just like you would be for a house. Like any homeowner, you’ll fix problems yourself or hire a contractor rather than calling maintenance. In short, the condo is yours. 

The Pros of Buying a Condo

The pros of buying a condo include:

1. You’re no longer at the mercy of a landlord’s annual rental increases. 
2. Condo prices are significantly lower than single family home prices.
3. You’ll build up equity in your condo. 
4. Eventually you can pay off your mortgage and own your condo free and clear.
5. Condos are easy to rent out for extra income and tax write-offs.
6. Condos generally appreciate in value just like single family homes do.
7. You can make improvements to your condo to make it more comfortable and valuable.
8. The HOA takes care of landscaping, roofing, common areas, and other building systems. 
9. You may enjoy amenities in your condo complex that you wouldn’t have been able to afford in a single family home, such as pools, gyms, home theater, tennis, golf, polo and gated security.

For many home buyers, these advantages will make buying a condo a clear and easy choice.

The Cons of Buying a Condo

Nothing in life comes without drawbacks. Here are some of the cons of buying a condo.

1. You’re living in a communal building, so you’ll enjoy less privacy than you would have enjoyed in a single family home.
2. You’ll have to deal with an HOA, which means abiding by HOA rules and paying HOA fees. 
3. If your HOA does a poor job of maintaining the building you’ll suffer a reduced quality of life—and reduced property values.
4. Condos take a little longer to sell than HOAs, in part because lenders scrutinize HOAs when deciding whether to approve the loan.
5. Some condos require higher down payments than single family homes do. 

You can mitigate many of these issues by thoroughly vetting the condo complex before making your purchase. 

See also: How to Save for a Down Payment

What to Consider Before Buying a Condo

Prior to purchasing a condo, you should investigate the following.

1. The financial stability of the HOA. 
2. The HOA’s track record. How well is it maintaining the overall building?
3. HOA regulations. Are the rules and restrictions something you can live with? Pay attention to common issues such as pet ownership, patio restrictions, and quiet hours.

You should also evaluate a condo the same way you’d evaluate a single-family home. Do you like the neighborhood? Do you like the location? How’s the commute? Do the neighbors seem quiet and friendly? Can you see yourself living in this condo for five years or longer?

See also: Condo Approval Status Lost? Here’s What You Need to Do

Finance Your Condo Today

You may obtain either an FHA, VA or a conventional mortgage on a condo, though the process can be more complex than obtaining a single family home mortgage. Lenders will take a hard look at the complex itself and the HOA that’s running it before approving your loan. 

If you want expert guidance while navigating condominium financing, you’ve come to the right place. Schedule a free one on one consultation with Alex Doce to get the help you need.