Should You Buy a Condo?
Are you considering buying a condo? There are definite advantages to owning one. Condos can be city dwellers’ go-to selection for lots of compelling reasons. Busy career people like the convenience of management’s role for maintenance, as do retirees who are happy to give up mowing the lawn or washing windows. First-time buyers often find condos more affordable than houses. Hipsters love living near all the action. Single women love the sense of security for peace of mind. But is it a sound investment?
A condominium, or condo is a kind of property ownership in which a person/people own a specific unit within a multi-unit development. You own the space and the walls that make up the unit, but not the land on which the condo sits. (It’s still considered real estate, however.) All unit owners share an interest as tenants in the common areas, such as hallways, lobbies and community amenities.
Costs of Single Family Homes Across the Country
Costs across our country vary tremendously depending on the state you live. Out of 51 states, (including Washington, D.C.) Washington ranks #5 with the average home costing $409,228. Compare this to the #1 costliest (Hawaii) at $636,451 and the least expensive average home cost (#51- West Virginia) $108,236, according to Business Insider (https://www.businessinsider.com/average-home-prices-in-every-state-washington-dc-2019-6#51-west-virginia-108236-1)
The National Association of Realtors found that the U.S. median sales price of a condo was $257,100 in May 2019, while single-family homes were $280,200—meaning condos were $23,000 less expensive
Condos are generally cheaper than single-family homes across the board, though. Compare this for condos:
Median cost across the country: $434,000
Median Cost in Seattle: $492,000
Compare this for single family homes:
Median cost across the country: $667,000
Median Cost in Seattle: $752,000
Condos generally grow in value over time, but single-family homes usually appreciate faster. Location affects this, of course, as does the quality of the home.
HOA stands for Home Owners Association. This Board has developed a set of rules and fees designed to maintain the value of the condo complex.It maintains the property so that everything looks and functions effectively, thereby preserving the value of your investment. The Board is made up of home owners just like you as a general rule. Each month or quarter, the HOA collects a fee from each unit so that it can handle maintenance and repairs for the common areas of the condo, whether it’s a pool, the roof, the parking garage, the elevator(s), or the foyer.
The Positives of Owning a Condo:
You will not only never have to mow your lawn, paint your house, have your home reroofed, or have any exterior repairs to your home like you did as a home owner. Not only is it taken care of by the HOA, you share the costs with other owners in your building. If you enjoy social contact with others, then there’s a community at your fingertips with whom to socialize.
The Negatives of Owning a Condo:
If the HOA is well-managed, then they will have the reserves to take care of the big repairs (e.g: siding, parking, or roofs.) If it’s not well governed, then the HOA Board can add additional bills to your monthly fees to make up for low monthly fees to cover repair costs. You will have no control over the HOA fees and increases besides your singular vote for changes in the fees or the rules governing the building.
There is an old adage regarding the value of real estate: Location, location, location. Condo prices vary tremendous within our country, depending upon where they are located. Here are median prices for condos in eight major cities in the U.S., remembering that prices vary depending upon location within these given cities.
Minneapolis, MN $329,900 Chicago,
IL $207,000 San Francisco,
CA $1,200,000 Seattle,
WA $492,000New York City,
While you’ll never have to worry about mowing the lawn, maintaining the roof, or replacing outdoor entrance lighting, these conveniences come with a price called monthly maintenance fees. As previously mentioned, the general maintenance of common elements and insurance are covered by these fees. They sometimes also pay (at least some) utilities, such as water, sewer, garbage collection, gas, and electric. The more amenities the condo boasts, (e.g.: concierge, fitness center, landscaped green space, rooftop deck) the more you’ll pay in fees. Costs range from $100-1000 per month, depending upon the amenities provided.
For tax purposes, each condo unit and its associated share in the undivided interest in the common areas is regarded as a parcel, and therefore individually assessed and taxed.
Condo ownership presents two advantages over renting:
- You receive the benefit of building your equity in the condo.
- You can take advantage of tax deductions for mortgage interest and property taxes.
Resale DeliberationsFirst of all, keep in mind that single-family homes are what the majority of buyers want, so if you’re considering your home as an investment and only an investment, then you might be better off buying a house if you’re financially able, or just rent your home and put your money elsewhere. If you’re looking for a place to call home, especially if you don’t want all the hassles of maintaining a home and yard (and you aren’t raising kids,) then a condo may be the right decision for you. Some excellent upgrades to enjoy today and assist in a quick sale later when you’re ready include:
- Hardwood, bamboo or cork flooring throughout the condo will bring a continuity to the unit and make it appear more expansive.
- Quality lighting can be installed (instead of keeping the builder-grade variety) including recessed lighting when possible. (Sometimes this isn’t possible to add because your ceiling is finished on concrete- impervious to added holes.)
- A midrange Bathroom remodel costing $25,416 will bring you nearly 79% return. If you can’t afford a full remodel, consider changing out the bathroom flooring to a neutral stone or porcelain. Change the backsplash around the vanity to neutral colored tiles like glass, ceramic, or porcelain. Change out the bathroom hardware (faucets, towel rods, hooks.)
- A midrange Kitchen remodel costing $76,145 will bring you nearly 70% return. Again, if you can’t afford a full remodel, consider changing out the appliances to stainless steel, which still remains the most popular of finishes. Change the countertops to granite, quartz, or limestone, in the kitchen.
Try to convey a feeling expansiveness with modern amenities. Bring as much light into the space as possible. Use neutral colors on the walls, and then you can add tasteful splashes of color in your furniture, accents, and accessories.
What comments or questions do you have running through your mind about condo purchase or ownership? Do you need help now that you’ve moved into your condo and want assistance making the most of your dollar on improvements? Contact us through this website if you live in the Puget Sound region.