The Pros of Condo Ownership
Condos are typically cheaper than homes. According to the National Association of Realtors, in December 2020, the median price for a detached single-family home was $314,300 while condos were fetching $272,200. In a city with a high cost of living, less expensive property can be a major selling point.
Geoffrey Frid is a luxury real estate broker in Beverly Hills, California, who sells condos and lives in one. "I'm a big believer in condominiums as a whole," he says. "They allow for first-time homeowners, young couples and even the retired to all live in a unit within a structured building that usually encompasses a gym, pool and various other amenities including but not limited to doormen, valet parking and more."
You don't have to mow your lawn. You'll want to take your cues from the condominium community you're moving into and not treat this article as gospel. But generally you're going to pay a fee and maybe two fees – a condominium fee or a homeowners association fee, or both. These fees generally go toward maintenance costs, such as having your lawn mowed or your roof repaired. Often you'll pay one fee that goes toward taking care of your home (the condo fee) and another fee (the homeowners association fee) that covers the maintenance of common areas shared by other condo owners such as trash collection and swimming pool cleaning. Condo fees can be relatively cheap (think: $75) or eye-popping (think: $1,000). It all depends on the condo community and the part of the country you live in. Those monthly fees may be annoying, but many people love the idea of not having to worry about mowing their lawn or shoveling their driveway.
The Cons of Condo Ownership
Condominiums have a history of being hard to sell. Fair or not, that's the reputation. Still, "while selling a condo can be tricky, that is not always the case," Miller says. "The complexity in selling a condo is related to the rules of the local HOA, the condition of the broader community and the financial strength of the community." Jesse Sheldon, director of operations for the Gordy Marks Real Estate Team in Kirkland, Washington, says he tried to sell his own condo earlier this year and wasn't able to find a buyer, "even in the overall great market we are in." The big problem for condos lately, according to Sheldon, has been – you guessed it – the ever-present pandemic. "Condos have not done really well since COVID started," he says. Randi Goodman, a real estate broker with Harvey Kalles Real Estate Ltd. Brokerage in Toronto, Ontario, agrees. She says that especially when the pandemic began, "people were looking to expand their space and not be in a small, confined space as most condos are."
The fees can be a deal-breaker. Condo fees and HOA fees can be steep on top of a mortgage and may feel like paying rent. Still, Frid says it generally comes down to whether the condominium and its community are wonderful places to live or not so much. "The ones that are tough to sell and sit on the market are those with exorbitant HOA fees, likely have more than a few units for sale at a time, inferior locations and are lacking the amenities," Frid says. But if you're truly excited to buy a condo and believe you're making a wise decision, future sellers will probably be happy to move into your condo someday. And if you do have trouble selling it, maybe your condo will still pay off for you. Sheldon says that when he struggled to sell his condo, he found a way to make money anyway. "I turned it into my first rental property, so it has still worked out for me," he says. "It has appreciated more than when I tried to sell it before, so I will still get a great return."