What Is a Condo — and Should I Buy One?

If you’re a first-time homebuyer, you may be wondering whether owning a condominium is more advantageous than buying a town house or a conventional home with a driveway and a big backyard. Maybe you’ve heard condo living offers added convenience and flexibility, since the upkeep of common areas is accounted for with quarterly or monthly condo association fees. Or perhaps you’re attracted to a condo rather than a town home thanks to added affordability, upscale facilities and high-tech security systems.

While there are plenty of pros and cons of condo living, before you decide whether an apartment, house or condo is the best residence choice for you, first consider these rules, restrictions and key differences.

[See: 10 Ways Millennials Are Changing Homebuying.]

What Is a condo?

A condominium is a private residence within a group of housing units owned by a family, an individual or a community. Typically, condo dwellings are adjacent to one another, or situated above or below other units, similar to apartment complexes.

How to Compare Condos, Apartments and Town Homes

The main difference between living in a condo versus an apartment is that condominiums are owned properties, while apartments are rented spaces. A condo may also be part of a smaller structure with multiple living spaces, such as a duplex or triplex. Condos can often resemble town homes and offer similar aspects of town house living, but with distinct ownership structures. For instance, many town home dwellers own the inside and exterior of their residences, while condo owners generally own only the inside of their units.

Should You Buy a Condo?

“For many people, perks like underground parking and no yardwork combined with building amenities like on-site gyms and social gatherings can be very appealing,” says Kris Lindahl, a broker and owner of Kris Lindahl Real Estate in Blaine, Minnesota.

While living in a community comes with a variety of benefits, keep in mind that there are rules about what you can do with your residence. For example, while you can paint the walls inside your condo unit, the exterior is another story altogether. The condo association‘s rules may prevent you from painting the outside of your home, among other restrictions. On the plus side, the condo association will pay for exterior maintenance tasks, including painting, mowing the lawn and replacing broken windows or roofing.

[See: 8 Potential Headaches to Be Aware of Before Becoming a Homeowner.]

“But those conveniences do come with a cost,” Lindahl says. “Association dues often run hundreds of dollars a month, or more, on top of your mortgage and taxes. You also need to be aware that associations can and do levy assessments for building upgrades and other expenses, which can run thousands of dollars.”

That said, if you prioritize perks and amenities, including having all routine maintenance tasks (think: trash collection) accounted for in your association dues, you may not view the fees as a major drawback. Lindahl suggests carefully reviewing association documents, which may disclose budget reserves and upcoming assessments, prior to closing the deal on a condo.

Common Misconceptions and Limitations of Condos

Before you commit to a condo, you’ll also want to factor in common rules and restrictions into the decision-making process. Keep these limitations and disadvantages in mind:

There are strict pet rules. If you’re thinking of getting a dog, remember there may be limitations set by your residential community. “Many associations have size, weight and number limits for pets, or even breed restrictions,” Lindahl says. He also recommends taking note of the condo’s soundproofing in place before you commit. “You may love dogs, but hearing your neighbor’s bark at night can be very frustrating. And if it’s your dog that gets anxious when you’re away and barks, you can end up with fines or even be forced to find him a new home if the neighbors complain too often.”

Multiple pets could be problematic occasionally. “I had a client who had to get a special letter permitting an extra cat to live in the apartment as the house rules stated that only one four-legged animal may reside in the apartment,” says Alex Lavrenov, an agent with Warburg Realty in New York City. He adds that sometimes a condo association will even ask for updated vet records and registrations.

You’ll need to pay for homeowners insurance. Don’t fall into the trap of thinking you won’t need homeowners insurance as a condo owner. “The (condo) building maintains its own insurance, but it doesn’t cover what’s in the unit. You have to maintain insurance for damage to your unit’s contents and certain fixtures. You are also responsible if your unit is the cause of damage to another unit,” says Michael Xylas, a co-partner in charge of the residential and banking real estate departments at Abrams Garfinkel Margolis Bergson, LLP, a law firm in New York City.

You can expect taxes to rise. “Another thing that must be considered is the real estate tax status of the condo unit,” Xylas says. “Some have enjoyed the benefits of tax exemptions and abatements that artificially lowered the unit owner’s tax bill.”

If that happens, the taxes are kept low for 10 or 15 years, and then they escalate over time, Xylas says. Stay prepared by reading the fine print and factoring in higher future taxes into your purchasing decision.

[See: 7 Things First-Time Homebuyers Wish They’d Known.]

You’ll need to deal with neighbors. A lack of privacy can be an issue as a condo dweller, Lavrenov says. With many condos, “all that really separates the individual owners are walls and doors.”

As Lindahl puts it, “Some condo owners love the social aspect of living close to your neighbors, but sharing common spaces like hallways, elevators and community rooms can be challenging if you don’t get along.”

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What Is a Condo — and Should I Buy One? originally appeared on usnews.com

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