Are you gearing up to make a lucrative home-ownership investment? The journey towards property ownership is riddled with challenging debates and opportunity costs. One of the most significant dilemmas that buyers face is determining the right type of property to offer them financial security and sizable returns on investment.
The condo vs. house debate can get overwhelming because there are numerous factors to consider. You may be swayed by the affordability and low-maintenance needs of a condo, while a house is more attractive to homeowners who desire privacy and autonomy. When it comes to choosing between a house or a condo, there are no one-fits-all solutions.
Every buyer has to make a decision based on his/her financial interests and investment strategy. This article will walk you through some practical factors to help you make a well-informed buying decision.
Buying a Condo
Many reasons encourage buyers to choose a condo for living or renting out. Condominiums make excellent investments for millennials, singles, and small families. Let’s take a closer look at the factors that make condos a worthwhile investment:
Price & Affordability
Condos are a more budget-friendly investment, especially if you’re in the buying market with a small down payment. If we compare a condo and a single-family home with similar location and characteristics, a condo is a more affordable investment.
Figures released by the National Association of Realtors revealed that in 2019, the median price for a single-family home stood at $274,600, while the median price for a condo was $249,500. The average difference of $25,000 is significant, especially when you’re struggling to pay off your mortgage loan.
If you’re shopping with a limited budget and a small down payment, a condo is an excellent choice to begin your real estate investment journey.
Homeowners that desire large outdoor and indoor spaces to get creative with comfort find condos hideously downsized and small. On average, condominiums are smaller than single-family homes, and they attract millennials and city-dwellers with their central location.
Condos are a leading housing solution for developers in city hubs and downtown. They allow professionals and families to situate themselves in the heart of the city, allowing proximity to business ecosystems, restaurants, retail, and entertainment outlets.
Facilities & Comforts
Many young professionals and millennial couples prefer condominiums because they come with additional amenities and comforts. For instance, most condo developments are equipped with swimming pools, a gym, laundry rooms, concierge services, repair and handyman services, and even a golf course. As a condo owner, you can enjoy superior life quality and a wide array of amenities without leaving your building.
Maintenance & Repairs
Repairs and upkeep are a massive expense for homeowners, and many buyers gravitate towards condominiums to reduce their living expenses. With a condo, homeowners only invest in indoor space, which reduces the hefty costs of maintaining grounds, lawns, and other areas. The maintenance of the exterior and common areas is entrusted to the Homeowner’s Association (HOA).
If you don’t have time to indulge in maintenance and additional domestic duties, a condo is a perfect investment to support your lifestyle. However, HOA memberships come with a hefty monthly payment, around $200 to $300.
A Vibrant Community
Condominium complexes allow singles and families to be a part of a vibrant and close-knit community. They are surrounded by like-minded professionals and city-dwellers, creating opportunities for friendships, socializing, and camaraderie. Homeowners can chat with their neighbors while doing the laundry, lounging by the pool, or working out at the gym.
Condos are much easier to rent out than a house in the suburbs. If you ever plan to relocate or upgrade to a bigger property, your condo will be ripe to create a passive income stream. Centrally located condos are easy to rent out, and you won’t have to wait for months to find a credible tenant. Amazingly, the HOA will take care of all upkeep and maintenance needs while you pocket the rent each month.
Buying a House
Condominiums have scores of advantages, and yet, many families gravitate towards enjoying the privacy and autonomy of a single-family home. Why do people prefer buying a house despite the affordability and comforts of a condo?
Let’s take a closer look at the reasons.
Independence & Autonomy
Home-ownership comes with independence and decision-making autonomy. You can change and improve anything you like, such as electronic systems, interior design, flooring, backyard sprucing, and outdoor constructions. Homeowners can customize anything they desire to change or improve inside and outside their home. In condos, owners must adhere to the guidelines and policies instated by the HOA.
Privacy & Discretion
Homeowners don’t have to worry about sharing walls and boundaries with other families. They can host late-night parties and blast loud music without disturbing the community. Many families value their privacy and prefer the comfort and space of having their own home.
Renovations & Improvements
All properties, be it a condo, a single-family home, or a townhouse, are enormous commitments. It is natural for humans to outgrow properties. People keep upgrading their space if their family increases, start a home-based business, or need more space. Condos are not capable of accommodating such changes because they is no room to grow. However, with a house, you have ample space to build annexes, transform the layout and floor plans, or construct a basement to enjoy more space.
Straightforward Selling Process
Much like condos are easier to rent, houses are easier to sell, should you ever feel the need to upgrade to a bigger property. Houses have a higher appreciation rate than condos, and you can make home improvements and upgrades to increase your profits.
You can increase the listing price and add value to your property by constructing an outdoor area with an elaborate deck, installing state-of-the-art kitchen appliances, or even adding a basement.
Each property comes with a distinctive array of pros and cons. Ultimately, the investment decision rests upon your strategy as an investor, intentions, and long-term wealth generation plans.