The National Association of Realtors reports that historical pricing for existing condominiums are only slightly less than the average price of single-family homes, giving rise to lifestyle being the primary reason for purchasing a condo rather than price. Geography also plays a role, as urban dwellers normally have greater access to condominiums. Both condos and single-family homes have clear advantages and disadvantages.
Traditional ownership of a detached home is called “fee simple,” where you own both the building and the land on which it sits. When you purchase a condominium, you own the interior building space, but the ownership of exterior walls, land and all common areas are shared among all of the owners. Owners of single-family homes are able to lease or rent the home as they see fit. Condo owners are subject to the rules and regulations set forth by the condominium development or homeowner’s association.
The purchase price of a single-family home or condo will vary depending on size, amenities, condition and geographic location. The cost of maintaining the home, however, may be very different. Owners of single-family homes are usually responsible for the full cost of all upkeep and repairs. Condominium owners are individually responsible for maintenance and repairs inside the condo, but share the cost of maintenance for all common areas and any other costs associated with running the development, such as private security, trash removal or running a business office. Condo owners normally pay for these costs via a set monthly fee. In some parts of the country, groups of single-family homes, called subdivisions or gated communities are popular. These work the same way as condominium developments, with shared maintenance fees for the common areas or services.
The only restrictions a single-family home normally has are those set forth by state or local governments. These usually have to do with safety issues, zoning and noise. Condo owners must adhere to the development’s Covenants, Conditions and Restrictions document. The rules set forth in many condo CC&R documents are fairly rigid, restricting the colors you can paint your home, objects you can put in your yard and sometimes even your landscaping choices. Single-family homes situated in gated communities or other subdivisions may have similar types of rules, but they are generally less restrictive.
Condos offer a different lifestyle than single-family homes. Although they may lack in privacy, since yards and common areas are shared by everyone in the development, they often have more amenities than single-family homes. Some of the amenities offered by condo developments include swimming pools, business office facilities, banquet facilities, basketball or tennis courts and even golf courses. Life in a condo is also simpler than single-family homes, as usually all the outdoor maintenance is taken care of by the development.
Appreciation and Resale
Realtor Karen Crystal states that historically, single-family homes appreciate more in value than condos, and the resale of your condo will most likely depend on the development’s amenities. Purchasing a condo is often a lifestyle choice, so matching up a potential buyer’s desires with the right condo amenities is key.
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