Buying a Condo vs a House: Pros and Cons
Choosing your next home can be exciting, but it isn’t necessarily easy. You want a home that best meets your lifestyle needs, and the answer may not be as obvious as you think.
To better help you find the right home, you need to decide on the type of property you want to live in. Everyone’s situation is different, and the best option for you might not be buying a house. A condominium offers many advantages over owning a single-family home, but does it match your lifestyle?
With a better understanding of what a condominium can offer, you can better narrow down the home you want to buy. We take a look at all the factors you should consider when deciding between a condo and a house.
What are Condo Communities?
A condominium, commonly known as a condo, can be described as an apartment that you own. The condo unit will be located in a large building or complex.
With a condo, you own everything inside the unit, including the interior walls, though not the exterior of the walls. Whereas with a house, you own the ground below the plot and the air above, as well as the interior and exterior of the building.
A house owner has rights to the structure and the land it stands on. In a condo, the exterior of the building is controlled by the homeowners association (HOA).
There will be communal areas that you share with other residents. These shared areas can include a gym, a swimming pool, gardens, and parking garages.
A condo association or HOA will manage the communal areas for the benefit of residents. As an owner of a condo, you will have to pay fees to the HOA for the management and upkeep of these communal spaces.
A condominium differs from a single-family residence in many ways. A single-family residence typically doesn’t share walls with its neighbors. It will usually have yard space around the property, and often features outbuildings, such as a garage.
Though initially, you might assume that a single-family residence is right for you, there are many reasons why a condo might be a better option. Let’s look at some of the main differences between condo living and single-family homes.
Living in a Condo or a House
Reasons to look at condos
- Lower costs: Typically, a condo will be more affordable.
- Less maintenance: The association will manage the maintenance requirements outside the condo.
- Amenities: Condos can provide amenities you wouldn’t usually have when living in a single-family home.
- Community: Since you live closer to other people, there’s often a stronger sense of community.
- Better locations: Condo developments can often be found closer to central locations.
Reasons not to choose a condo
- Reduced privacy: Living closer to other people naturally reduces how much privacy you will have.
- HOA fees: A condo owner must pay monthly fees to the HOA, which cover maintenance and amenities.
- Less freedom: Owners have to follow HOA rules.
Reasons to choose a house
- More privacy: Your neighbors will be further away, so your home life can be more private.
- More space: Houses usually offer more space, both within the home and the yard.
- More freedom: Owning a house means you have more control over what you do with it and the changes you make.
- No HOA fees: If your home isn’t part of an HOA, you won’t have to worry about their fees or their rules.
Reasons not to choose a house
- More responsibilities: When you own a house, you are responsible for all the interior and exterior maintenance.
- Higher costs: The house is likely to cost more initially and have more expensive utility and maintenance bills.
- Few or no amenities: Single-family residences often don’t have the same level of access to amenities.
- Less community: Depending on the location, there is less likely to be a community feel compared to a condo development.
Let’s look at some of these points in more detail to help you better understand which type of home is right for you:
How Important are Amenities?
A significant difference between owning a condo versus owning a home can be the condo amenities available to you. While a house might have a pool or access to a gym, it’s going to be more costly than shared facilities in a condo common area.
If you believe you would make use of these facilities, living in a condo is a convenient way to incorporate them into your lifestyle. Utilizing these amenities can help you get to know your neighbors and foster a sense of community.
The expense for these amenities will be included in your HOA fees, though it will be worthwhile if you make the most of them. If you’ve always wanted a home with a swimming pool, this is a hassle-free way to get it, as long as you don’t mind sharing.
Different condo complexes will offer varying amenities. If one complex has amenities you would never use or want to pay for, choose one that better offers the things you want.
How Much Space Do You Want?
Typically, a single-family home will offer more space than a condo. For the same amount of money, you would generally expect to get more space in a single-family home compared to a condo.
While you might initially be attracted to the idea of a larger home, there are some downsides you might not have considered. With a smaller space, there’s less to clean, less to decorate and furnish, and less room for any clutter.
A condo will limit your options should you need more space. Of course, you won’t be able to add another room onto the building. But even if you have space to create another bedroom within the property, that may not be allowed. There are often restrictions that prevent a seller from marketing their condo with more bedrooms.
Location
Condo complexes can often be located in more interesting and exciting areas. If you want to live near the center of the city, it will be easier to find a home in that area if you’re looking for a condo.
It’s more common for single-family residences to be located further away from downtown. Houses are more typically located in the suburbs, which require longer journeys to commonly visited destinations. If you want to live in a walkable neighborhood, you’re more likely to find it when choosing a condo. Living closer to the city center can allow faster commutes and more activities on your doorstep.
Maintenance and Repairs for Your Home
When you own a single-family house, you’re going to be responsible for all the maintenance issues. With a condo, you have fewer maintenance concerns to worry about. Any communal areas and the outside of the building will be the responsibility of the HOA.
Even though with a condo, you are more likely to pay HOA fees, you are less likely to have to deal with repairs yourself. If major repairs are needed to the building, you will share the costs with other residents. Before you decide to buy a particular condo, check what the monthly HOA fees cover and what you are required to deal with yourself. Very low HOA fees can sometimes hide deferred maintenance or signal the risk of special assessments
If you enjoy yard work and having your own space outside, a condo isn’t going to be right for you.
Applying for a Mortgage
When you’re buying a single-family residence, getting a home loan is fairly straightforward. However, there can be more issues when financing a condo purchase.
You could find a condo that you really like, only to discover that it is not FHA-approved. Without FHA approval, you will have fewer loan options.
If the development isn’t approved, it might be because it doesn’t meet the FHA’s minimum property requirements. The FHA requires the property to be a sound investment, so if the home isn’t approved, it might cause you to think twice anyway. The condo complex might not have approval because it has lapsed or because they’ve never applied for it in the first place.
Also, check whether the condo building is warrantable or non‑warrantable, since non‑warrantable condos often limit mortgage options and can make resale harder; lenders may require larger down payments or deny certain loan types for non‑warrantable projects. If you’re unsure, ask your lender and review the HOA’s governing documents to confirm the condo’s status and any financing implications.
If you’re truly interested in a home and want to finance it using a government-backed loan, you may be eligible for spot approval through the FHA single-unit approval program. Without FHA approval, you can still try to buy the home using a conventional loan.
Appreciation
While the value of your home will generally appreciate over time, condos tend to grow at a slightly slower rate when compared to houses. The overall value of your home will depend on location and local housing demand, among other factors. But with a condo, you might expect slightly lower increases compared to houses in the same area.
Special Assessments
Many condo associations are well-run, but some won’t be. If it isn’t well run, there could be more special assessments to pay for maintenance. If the association has a well-funded reserve, it will already have the money required to pay for the maintenance issues and won’t need to ask condo homeowners for more through a special assessment.
This type of issue isn’t usually a concern when buying a single-family residence. These problems can be minimized if you check the condo association’s financial health before making an offer.
Privacy Concerns
Since a single-family residence is separated from neighboring properties, it provides more privacy. Whereas with a condo, you are sharing walls and common spaces with your neighbors.
Living in a condo means living in closer proximity to other people. If your neighbors are having an argument next door, or above or below you, you might learn more about their lives than you really want. You would also meet people in corridors, elevators, and other communal areas.
This lifestyle can mean you get to know people more easily, but if that’s not what you’re looking for, it will be a downside.
Condo Association Restrictions
Living in a condo means that you have to abide by the association’s covenants and rules. These restrictions could leave you feeling controlled and limited in what you can do to your own home.
There might be limits on the type and number of pets you can own. You can expect rules about noise and restrictions on storing items outside the condo. HOA rules are also an issue that often affects single-family residences, though it is less common.
If you buy a house that isn’t part of an HOA, you won’t have to deal with these restrictions and can do what you want with the property. Without the HOA, you also won’t have to pay their fees, though this might mean that your neighborhood isn’t as well-maintained. On top of this, you will be responsible for all the maintenance your home needs.
Rental Restrictions and Resale Difficulties
While this is unlikely to be a problem with houses, condos can have restrictions on whether you can rent them out. There might be a limit on the number of homes that can be rented out in the condo complex, or perhaps it’s not allowed at all. If you have no intention of renting your property, this won’t be a concern, but it could make selling more difficult.
Finding a buyer for your condo property can be more challenging in some situations. Buyers might not appreciate the HOA restrictions or have concerns over its financial health. If rentals are restricted, investors are less likely to be interested in the condo. And this means fewer potential buyers and fewer offers for your property.
How Much Do You Want to Spend?
Generally, single-family residences are more expensive than condos. Buying a condo should mean lower monthly expenses, with smaller mortgage premiums and more consistent fees.
Thanks to the lower prices, condos are popular with first-time buyers and older people looking to downsize. Lower maintenance costs also make condos popular with these buyers.
Summing Up Condos vs Houses: What to Consider
When buyers start to think about their next home, it’s common to just think about buying another house. But, as you can see, there are many benefits to condo living, and these shouldn’t be overlooked.
The type of home you live in can make a significant difference to your life. And when it comes to choosing between a condo and a house, there are many factors to consider before you make your decision. But with a better understanding of what is offered with condo living, you might find it makes more sense in your situation.
About the author: This article was written by Luke Skar of MadisonMortgageGuys.com. As the Social Media Strategist, his role is to provide original content for all of their social media profiles as well as generate new leads from his website.
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