Owning a House vs. Condo

[vy2005]

In the next 12-18 months, I'll be looking to purchase my first home or condo. I've rented my whole life so not familiar with the process of buying but wanted to pros and cons of buying a home vs. a condo here in Austin. Is everything the same pretty much with property taxes and fees, closing costs, etc? What about resell value of one over the other? Basically I'm looking for some things to sway me to one over the other?

 

[CaptainEd]

i've lived in a condo for a little over 2 years and i'm about to sell it to get a house. it has appreciated ~30% in that time based on neighbors' pending contracts so it has been a great investment and a great place to live as well.

i just want to get a house/lot as i think that is a more secure long-term investment but that is not a slam on condos. while my initial thought process was "with the house i need to save for incidentals & repairs, but with the condo i don't" that's really only a generalization and true to the outside/common areas. additionally, factor your increased h.o.a. monthlies into what you could be paying in mortgage on a house.

either way, buying is a good decision.

 

[bluto]

'condo' covers quite a large spectrum. it ranges from anything like downtown highrise to an old apt complex thats been convereted to a small townhouse style regime to a single unit of a duplex to an actual house thats labelled a 'condo' despite it being completely void of common walls and having completely separate yards (PM me if interested in the duplex or house style).

In general, the regular single family house house will be the least affected by falling prices and have just as good if not better appreciation. the one thing about condo's in the future is that with the massive amount of people about to hit retirement, condo's are enticing due to the lack of lawn care and exterior maintenance.

hope that helped a little bit.

 

[Stuck_At_Work]

I own a condo, and may be in the market for a house in the near future. I will hold on to the condo as a rental property. It has increased about 30% in value over the last 3 years, so it was a good investment.

As someone mentioned, condos range a wide spectrum. If you are talking about a downtown condo, the problem is on top of paying a huge mortgage, you are also paying a huge monthly HOA to maintain the high-rise structure. The last downtown condo I looked at had a monthly HOA of 500 (which is a lot of money for someone a few years out of college).

I ended up buying a condo in the Far West area for < $90 per sq ft with a monthly HOA of $140. That HOA covers insurance for the structure, maintanance and repairs for the building & property, waste, water, groundskeeping, pool, and even cable TV.

Eventually, I'll want a house... but for a single guy like me... a 2 bedroom condo was perfect for the last few years.

Re-sell of condos is generally more difficult than homes. However, that data is a little skewed. If you talk to a realtor, they will tell you that re-sell of small 1 bedroom condos is difficult because most people don't want a 1 bedroom condo. 2+ bedroom condos generally stay on the market far less time.

 

[tropheus]

I echo bluto's comments entirely with one addition. In a condo you are financially intertwined with your neighbors as the HOA is an extension of the owners. If capital improvements are required you have to go to all owners for an assessment. In many cases, that assessment is up to a vote of the owners. I lived in a condo and was on the board of one, acting as president. We had an assessment. It sucked having to convince people to invest in their roof, walls, grounds. It sucked.

If you go the condo route, you absolutely must walk all the buildings and review the last couple years of expenses and revenues. It would be good to talk to the president or other board member who is the most involved to discuss operations, expenses, upcoming capital improvements, etc.

You should also review the governing documents to see what your relative rights are as an owner with respect to voting for the board and for assessments.

Condos are generally a first and last stop for many on the home ownership cycle, unfortunately, as a first purchase, its more complicated than the purchase of a single family home. So do your homework.

 

[clandestine]

What effect will the dramatic and relatively sudden increase in the number of condo units in central Austin have on that market in the short and long terms? I don't know **** about real estate market trends, but I can't imagine that buying a condo is a particularly good short term (3-5 years) investment right now considering all of the new development and an impending recession. But like I said, I don't know what I am talking about.

 

[CleverNickname]

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[NBMisha]

On a sq ft basis, for similar locations, newer condo's cost more, including taxes and hoa's, than do similar state of repair houses. It depends on your own desires. For many years I got off on landscaping, etc. And was cheap. The house was the best option. We're now about to close on our first condo. And I hire out almost all tasks on the current house. I think the cost trade, now, is worth it.

So, decide what you want, in terms of lifestyle.

 

[KerrHorn82]

With condos I think you're better off trying to spend closer to 200k, getting something outside of downtown that's in good condition. The market for a condo in that price range when it comes time to sell will probably be a lot bigger than the market for the $350,000 800 sq ft. downtown highrises.