The home-buying process is riddled with roadblocks, conundrums and important decisions that impact the long-term worth and wealth generation potential of your investment. The condo vs. house debate is a popular one, because most buyers explore both options to examine affordability, maintenance expenses and resale potential.
Those who value privacy always gravitate towards a house. But those who prioritize market-savviness and affordability gravitate towards condos.
The following factors determine the right investment for a buyer:
- Accommodation and square footage requirements
- Intentions: Persona use, rental or resale
- Financial health and buying power
There are many other factors that come into play but essentially, your needs, intentions and buying power determine the right choice. There are several major differences between a condo and a house, and these differences will impact the worth of your investment. Keep reading to identify the right choice for your intentions and financial goals.
Buying a Condominium
There are many reasons why buying a condo is a more lucrative and flexible investment for first-time home-buyers. Let’s take a closer look at these reasons.
A condo and a single-family home are quite similar, and if they’re located in the same neighborhood or location, the cost different will be substantial. Comparatively, condos are much more affordable while a house can create a financial strain, given the greater mortgage loan and obligation.
Industry projections reveal that in 2019, the median cost of a single-family home amounted over $270,000, while the average cost of a condo was valued around $249,000. A $25,000 price difference is huge, especially if you have a smaller down payment and a massive loan.
If you’re working with a limited budget, a condo can help you score a flexible loan repayment schedule with a lower down payment.
Condos are a leading choice for city dwellers who want to be in close proximity to corporate ecosystems and leading attractions. On the other hand, families that need more space and love entertaining enjoy big houses in the suburbs.
Millennials gravitate towards condos as they don’t need much space, but a central location is a priority so they can enjoy a vibrant city life and explore employment opportunities.
Amenities & Features
Condominiums offer a wide array of amenities that enhance life quality, while homeowners usually have to invest in these amenities and facilities themselves. For instance, condo owners have access to concierge services, fitness studios and gyms, swimming pool, laundry room, in-house repairman services, and some communities also have their own golf course.
In recent years, the condo market has undergone striking developments and innovations to support modern life quality and add value.
No Maintenance Responsibilities
While buying a condominium, a homeowner is buying the interior space within a complex, which eliminates all landscaping responsibilities and on-ground upkeep. The responsibility for maintaining the exterior falls upon the homeowner’s association (HOA). City dwellers prefer condos and are willing to pay the monthly HOA fees to avoid dealing with maintenance and repairs.
A Vibrant Community
Condo owners enjoy living in a vibrant community of like-minded professionals and city dwellers. They have community support and an abundance of opportunities to socialize at the pool, the rooftop hangout spot or chat in the laundry room.
High Income Potential
If you ever plan to upgrade to a large suburban house, your centrally-located condo can generate a passive income stream to pay off your mortgage. It’s much easier to rent out than a house, because city dwellings are always high in demand and low in supply. Besides, the HOA will take care of maintenance issues and exterior upkeep while you collect the rent each month.
Buying a House
Buying a single-family or spacious suburban home has its own advantages, and many families need more space. Let’s take a look at while a spacious house is a more lucrative investment for you. Autonomy & Control
Home-ownership brings autonomy and control, and homeowners can customize their home any way they want without any external objections. In condo communities, the HOA exerts significant influence and imposes roles regarding pet-policies and customization. But with a house, you have great autonomy and the control to customize every single element to your taste and comfort.
Sharing walls and floors with multiple families is not easy. At times, you can easily hear your neighbors while having a romantic dinner with your partner, or putting your kids to sleep. Having your own house offers unmatched privacy so you can throw wild parties and not have to listen to arguments in your neighbor’s house.
Renovations, Expansions & Improvements
Buying a home is a massive commitment, and your investment must align well with your life plans, and changes. If you’re growing your family, running a home-based business to acquiring new hobbies, you will need a lot of room. Having your own house allows you to make improvements, expansions and renovations to suit your lifestyle.
You can alter the floor plan to make room for a nursery, or transform the kitchen with a lovely herb garden and a seating arrangement. You can alter the layout however you please. Build a swimming pool in the backyard, create a terrace or build a basement.
Higher Resale Value
Houses are much easier to sell, much like condos are easier to rent. They have a higher resale value because houses appreciate much more than condominiums. And you can increase the value effectively by making improvements, enhancing the curb appeal, paving the driveway or adding a swimming pool to the mix. Selling a house is much easier and more lucrative, in case you plan to upgrade to a bigger home.
Each investment has its own advantages and drawbacks. As a buyer, you must prioritize research and explore market trends to identify lucrative opportunities. Remember, the most crucial factors are your preferences, square footage needs, affordability and buyer power. It is also crucial to examine the long-term resale value and appreciation rate of your chosen investment.