Does a Condo Make a Good First Home?

Single-family homes seem like the iconic starter home, but they aren’t the only available options. Condominiums or condos can make terrific starter homes for the right people. Whether you are just moving out of your parents’ home or are ready to stop renting, condos deserve a second look as you explore the options for your new home.

Some first time buyers might not feel ready to tackle the size and maintenance demands of a single family home, but are more than capable of owning their own place. By overlooking condos, they get stuck renting a house or apartment or end up buying a house that does not quite fit their current lifestyle.

A condo may be the perfect solution to this dilemma.

What is a Condo?

First things first, what exactly is a condo? A condo is similar to an apartment, except you own the unit. They are typically located in complexes with several units in one building. You’ll share at least one wall with a neighbor, sometimes more, and if you live in a multi-story complex, you may have neighbors above or below you.

In general, condo owners are responsible for the maintenance and upkeep of anything located inside their unit, while a homeowners association or condo owners association manages exterior maintenance such as landscaping, snow and ice removal, and exterior renovations and improvements.

The association is made up of a board of directors, who are actual owners in the complex; as an owner yourself, you’d be eligible to sit on the board and have a say in how the association dues are used. You will pay a monthly fee to the association to contribute to this upkeep, but you won’t have to actually manage the work yourself.

Some complexes have community spaces and amenities like on-site gyms, pools, BBQs, and gathering areas. Others are strictly comprised of individual living units.

5 Reasons Why Condos Make Great First Homes

1. They Make Financial Sense

If you have good credit, solid income, and can qualify for a mortgage, buying a new condo can make more financial sense than renting. Rather than line a landlord’s pockets, you own the unit and receive all the same benefits as single family homeowners such as tax write-offs, equity and appreciation, and possibly making a profit when you decide to move up from your starter home.

Depending on where you live, condos can cost less than a comparable single-family home which can put homeownership within reach for some buyers who might not qualify for a higher priced house. Utility bills may be lower due to smaller space and the fact that units are adjacent to one another (heating costs may be lower, for example).

“If you’re financing your home, the HOA fees factor into affordability,” says Karen Kitzmiller, a Real Estate Broker with Century 21 Real Estate Consultants in Charlotte, N.C. “Some places charge $400 or $500 a month because they include cable, water and sewer services, which will be part of your monthly expenses.”

2. The Size is Right

Some first-time buyers are intimidated by the thought of all the space in a single family home, particularly if they will be living alone. Sometimes a detached house is just too much space for one or two people. Condos get around this problem by offering smaller footprints and a more compact living space that still provides plenty of elbow room. If you’re determined that this first purchase is only going to be a starter home, it makes much more sense to buy what fits your needs now and upgrade later on, when the need arises than to take on more than you are comfortable with right now.

3. Location, Location, Location

Condos are particularly well-suited to young, working professionals. They are typically located in more urban settings, making them more accessible to public transit options, city and workforce centers, and entertainment and dining options. They are more densely populated than single family home neighborhoods which helps to boost social interactions and create a sense of community.

For buyers who value a convenient location over a yard or extra bedrooms, the simplified urban lifestyle of a condo can be very attractive. When the time comes to sell, condo owners may have an advantage over single family homeowners, because of the location of the unit.

After all, there are always going to be people who want to live closer to work and don’t want the demands of a house.

4. Minimal Maintenance Demands

The most obvious difference between condos and single family homes is the lack of a yard. Many buyers don’t want or need the added financial and maintenance strain of a yard, some don’t have the skills, others don’t have the time or interest, still others balk at the idea of emergency repairs.

A condo is a happy medium. The condo association manages all exterior needs and maintenance costs are shared between all members of the homeowners association through the monthly association fees. Emergency repairs, like a new roof, for example, are also shared between all condo owners, usually through a special one-time assessment.

“Those with many other responsibilities may not have time for home maintenance. Condos are also a convenient option for people who travel a lot,”says Carlsbad, CA Real Estate Agent Jordan Clarke.

5. Robust Amenities

There’s something to be said for the add-ons available in some condo complexes. Community features like pools, fitness centers, and 24-hour gated security are amenities that simply would not be available with most single-family starter homes.

There is also a sense of community in condo complexes that cannot be replicated in a single-family home neighborhood. Complexes often hold social events and gatherings where you can meet your neighbors and expand your social circle. Pets are typically welcome.

A Condo Meets All the Requirements of a Starter Home

Condos tick all the boxes when it comes to defining a starter home:

• Not too big, not too small
• Independent living situation
• Resale value
• Builds money management skills

Like a single-family starter home, condos are an excellent first step into homeownership, giving buyers a chance to obtain a mortgage and become homeowners at a lower cost and with less responsibility than a single family home purchase. First time buyers who don’t consider condos are doing themselves a disservice. By dismissing the idea of condos, buyers limit their choices – and may be limiting their ability to become homeowners.

Learn more about buying new condos on NewHomeSource.com and decide for yourself what kind of starter home is best for you.