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  • Writer's pictureMilan Kangrga

Unlocking Condo Life: What You Need to Know Before You Buy or Invest

You're curious about condos, and for good reason—they're a game-changer in the real estate world. Imagine owning your place, but without the hassle of tending to a sprawling lawn or fixing a leaky roof. Yep, that's the magic of a condo. It's the golden middle ground between renting an apartment and owning a traditional house. You get your own space, your own rules, and a bunch of community perks thrown in. It's like the all-in-one package deal of homeownership. But hey, it's not a one-size-fits-all deal. There are nuances to consider, pros and cons to weigh, and choices to make. Ready to dive in? Let's unpack everything you need to know about the condo lifestyle, from mortgages to maintenance and beyond.


What is a Condo?

Before we dive into the ins and outs of buying a condo, let's first talk about what a condo, or condominium, even is. Well, picture an apartment building, but instead of just renting, you actually own your unit. That's a condo for you. When you hear about folks renting a condo, they're usually renting it straight from the person who owns that specific unit, not a big management company.

Now, ownership comes with some perks and responsibilities. You're the king or queen of your own castle, meaning everything that happens inside your unit—think maintenance and repairs—that's on you. You've also got to chip in some regular fees to a condo association. Why? Well, those fees are like a community pot that takes care of shared spaces and amenities everyone gets to enjoy. So, you're not just investing in your unit, you're investing in the whole living experience.

If you're set on a condo lifestyle then the million-dollar question is: should you rent or buy? It all boils down to your budget and financial goals. Buying means you're building equity and owning a space that's genuinely yours. But hold up—ownership's not all glitz and glamour. You're signing up for those surprise costs and the full-on responsibility of maintaining your pad. Weigh your options carefully; it's a big move either way.

And if you're thinking about jumping into the real estate investment game then condos could be your golden ticket. They're usually easier on the wallet, making them a solid starter for rookie investors. But don't start popping champagne just yet. Investing in a condo isn't a no-brainer; it comes with its own set of pros and cons. So, make sure you've got your investment game plan sorted before you dive in.


The Good and The Bad

If you're looking to own a place but don't want the hassle of a big yard or sky-high price tag? Condos might just be your match. You get the best of both worlds—ownership perks plus community amenities without breaking the bank. Perfect for empty nesters wanting to downsize or city-loving first-timers who find single-family homes a bit too pricey. Yep, condos are a one-size-fits-most solution to modern living. When comparing purchasing a condo to purchasing a single-family home the pros and cons can vary, but lets take a look at some of the typical pros/cons.


  • Added Amenities: Who doesn't love extras, right? With condos, you often get cool shared amenities like pools, dog parks, or even parking garages. And the best part? You don't have to lift a finger to maintain them. That's all taken care of by the HOA. So, you get to enjoy the perks without the work.

  • Less Maintenance: You want to own but dread the thought of lawn care and roof repairs? Condos could be your answer. They give you the best of both worlds: property ownership without the chore list of a single-family home. So you can kick back, relax, and let someone else handle the mowing and shoveling.

  • More Affordable: Thinking homeownership is a stretch for your budget? Don't count yourself out just yet. Condos often come with a smaller price tag than traditional homes, making them a perfect stepping stone for first-time buyers or those with a tighter budget. Yes, there are condo fees, but when you do the math, you might find a condo is a more wallet-friendly option.


  • HOA Restrictions: Ah, the HOA—your new partner in condo living. Now, this relationship comes with some ground rules. Think pet policies, rental limits, you get the drift. Plus, there's a monthly HOA fee you'll have to factor into your budget. This fee goes towards making those common areas sparkle and keeping the building in top shape. Just remember, these fees can fluctuate a lot depending on where your condo's located and how big it is. So make sure you're comfy with the HOA scene before diving in.

  • Less Square Footage: If you're all about that extra legroom or have a big family, listen up. Condos usually don't have a sprawling backyard or a massive living space. So, you might feel a bit snug. Want some fresh air or a place for the kids to play? You might have to trek a bit to find a park or playground. It's not a deal-breaker, but definitely something to chew on if outdoor space is your jam.

  • Less Privacy: Look, living in a condo is a bit like having an extended family—you've got neighbors pretty much everywhere. Sure, it's cool to bump into folks in the shared spaces, but remember, walls are shared too. That means you might catch an earful of your neighbor's TV binge sessions or even their heated debates. And oh, about those long-stay guests? The HOA might have some rules about how long they can hang. So, if privacy is high on your list, take note.


Types of Condo Mortgages

Technically, you can use the same loan programs for condos that you would use for a single-family house. However, more restrictions are involved, and not all complexes are eligible for each program. First, let's talk about warrantable vs. non-warrantable condos.

Fannie Mae and Freddie Mac set out rules to ensure that mortgages issued for condos present a reasonable risk for both lenders and buyers. If a complex follows these rules, it is considered a warrantable condo. If it doesn't, then it's a non-warrantable condo. Financing a non-warrantable condo will generally be more difficult. You won't have access to low down payment options and will be limited to a very small pool of potential lenders—or you may have no financing options at all.

Conventional Loans: These loans offer financing for condos with as little as 3% down. Conventional loans follow guidelines set by Fannie Mae and Freddie Mac. Because of this your condo will have to be warrantable to be eligible.

FHA Loans: FHA loans offer financing with as little as 3.5% down. Your condo will need to be on an FHA approved condo list, which you can find here.

VA Loans: VA loans are for eligible borrowers only, and offer financing with as little as zero down. Your condo will need to be on a VA approved condo list, which you can find here.

USDA Loans: USDA loans offer 0% down payment options to low-income borrowers in rural areas. Your condo will need to be on the USDA's property eligibility list, which you can find here.


5 Tips for Buying a Condo

Don't go at it alone: If you're getting serious about snagging a condo, you might wanna think about bringing in the pros—a local real estate agent and lender who know the condo game inside and out. These folks can help you sift through the nitty-gritty, like those condo association docs, bylaws, and the latest rules and budgets. Trust me, you want to know if there's anything in those papers that's gonna cramp your style before you take the plunge.

Do your own research: Besides teaming up with a savvy real estate pro, don't forget to do a little detective work yourself. Look into that condo association's track record. Got any lawsuits or frequent late payments on their hands? That's stuff you'll want to know. If you can, go ahead and shake hands with the association's big wigs and the folks living there. The more you know, the better.

Get the scoop on special assessments: Ever heard of a "special assessment?" It's like a curveball the condo association can throw at you when their budget's running low—for big stuff like, say, a new roof. So, when you're in the game of buying a condo, be sure to ask about any current or future special assessments. This way, you're not blindsided by any surprise costs down the road.

Take a close look at the amenities: Looking forward to that clubhouse and pool? Just make sure those extra perks are worth the extra bucks. When you're shopping around for a condo, weigh those amenities like you're comparing apples to apples. And heads up, your mortgage lender's gonna want the 411 on these amenities too, as part of their evaluation.

Find out if there are any restrictions on renting: Thinking of turning your condo into a cash cow with Airbnb? Before you start counting that passive income, you've got to check in with the condo association. They might have some rules on leasing out your place. Better to be in the know than caught off guard.


Condo Vs. Townhouse

When considering if a condo is the right move for you, I would also suggest comparing to a townhouse, or townhome. Think of a townhome as the love child between a condo and a single-family house. Generally, townhomes are multi-story homes that might share a wall or two, but never above or below you. Let's look at they differ from condos.

Ownership Showdown: So how do townhomes stack up against condos in the ownership arena? Well, townhome ownership usually comes in two flavors: condominium-style and fee-simple. With the condo-style, it's a lot like owning a condo—you own the inside, and your HOA fees take care of common areas and the exterior. Fee-simple? That means you're the king or queen of not just your castle, but the land it sits on too.

Rules of the Game: When it comes to rules, condo associations usually play hardball compared to townhome HOAs. Why? Because townhomes usually require less maintenance. If you're in a fee-simple townhome, you're calling the shots for the interior, exterior, and even the lot it's on.

The Price is Right... Or Is It? Townhomes usually come with a lighter price tag compared to condos. You're getting a bigger lot and usually coughing up fewer HOA fees. But don't forget—you're also on the hook for maintaining that extra space.

Perks and Amenities: Townhomes usually don't roll out the red carpet with amenities like condos do. But some of the newer townhome communities are stepping up their game, offering things like pools and playgrounds.

Maintenance Mode: So, you're paying fewer HOA fees with a townhome. Sounds great, right? Just remember, that also means you've got to put in more elbow grease. Unlike a condo, where you're only worrying about what's between your walls, with a townhome, you're also the caretaker for the roof, exterior, and property. So factor that into your decision-making.

Financing: Securing a mortgage for a townhome is usually as easy-breezy as it is for a detached house. Unlike the hoops you might have to jump through for condo financing, townhomes usually give you a straight shot at various mortgage options without the fuss. Less red tape, more high-fives, folks.



Alright, let's wrap this up. Condos offer a unique blend of ownership freedom and community perks, making them an attractive choice for a wide range of folks—from first-time buyers to savvy investors. But like any big life decision, it comes with its own set of challenges and trade-offs. The key?

Know what you're getting into. Do your homework, weigh the pros and cons, and consult the pros to help guide you. Whether you're looking for an easier entry into homeownership or an investment that's lighter on maintenance, condos can be a solid move. Just make sure you've got your game plan set, so you can truly make the most out of your condo living experience.

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