Everyone knows that condominiums are a bad investment and that houses are better, RIGHT? I don’t know if that’s the case at all, and today I’ll be helping you determine if it’s better to buy a house or a condo. I’ll be using some common rationale and some data, so be sure to read through until the end, when I expose a lie that we may have all been telling ourselves!

Before we determine which is better, we must determine YOUR needs, because YOUR needs can determine if it’s better for you. For instance, if you’re a 25-year-old student working nights and weekends, then you have one set of needs, whereas a 30 something couple with a young family may have other needs. Then, investors have still different needs. So, it really isn’t a matter of one being better for everyone, it has more to do with one’s needs.

Let’s start with some pros and cons of condos. The greatest advantage of purchasing a condo is the maintenance, or lack thereof. In most condos, you’ll be required to pay a fee, usually monthly, that covers things like new roofs, exterior painting and maintenance, lawn maintenance and landscaping, swimming pools and all that. Plus, the purchase price of condos tends to be less than single family homes. Although it’s generally a pro that condo prices tend to decline more slowly in a recession than house prices, they also tend to appreciate more slowly, so I don’t see any real difference here.

As an investor, I LOVE the fact that I don’t have to worry about whether my tenants are mowing the lawn or keeping up the exterior of the home. If they make a mess outside, I know that someone will report them, and I can address it at that time. Yes, they can still trash the inside, but at least I don’t have to worry about the exterior. As an investor, that worry is worth something, and in this case, I believe that monthly fee is well worth the expense.

Next, let’s look at a few cons of condos. Of course, that condo fee is a HUGE con, and some of these fees can be several hundred dollars each month, possibly even a thousand dollars or more! The question for me is “is that fee worth the benefit that I get?” I currently own a condo unit as an investment property in Port Orange, technically it’s a townhome, but the same principle applies. For me, this property is a great investment in spite of the monthly fees that I have to pay.

Condos tend to be smaller than houses, too, and that “smallness” means less space for your “stuff.” I’ve sold condos to many buyers over the years and it’s pretty common that if they’re moving from a single-family home, they’re having to get rid of some of their stuff as there just isn’t space for it in most of these condos. Another con of condos is that, occasionally, owners are hit with assessments which can amount to thousands of dollars and there’s nothing that an owner can do about it.

Yes, you’ve got neighbors right on top of you, and they’re sometimes blaring their music and sometimes you’re so close that you can hear them chatting in the next unit over, which, depending on the situation, could be the greatest con of all.

So we’ve spent some time addressing condos, but we all know that the single family residential home is the American Dream, right? Well, yes…and no. The American Dream is freedom, prosperity and individual happiness. As such, don’t think that owning a house makes you successful. I own a single-family residential house and I wouldn’t have it any other way. I’ve got privacy, no HOA or condo fees, and I cannot hear my neighbors. It’s great! I also know that it’s on ME to maintain the yard, landscaping, roof, and swimming pool. If I drop the ball, for any reason at all, I pay the price. It’s sort of like paying the price of a condo fee. I’m fine with that risk for now, but I’m not so sure what that will look like in another 10 or 15 years when that maintenance becomes more of a physical problem for me.

The expense of a single-family home can be significantly more than that of a condominium. Here in Central Florida, where I help sellers sell and buyers buy, the median sale price of a condominium is right around $196,000. The median sale price of a single-family home is right around $350,000. I know that condos tend to be smaller, but that’s a huge difference if you’re looking at the purchase price. Don’t forget about utility expenses, which tend to be higher in a single-family home than in a condo. Home insurance? Yes, it’s often more expensive than a condo, too.

If you’re considering the entire cost of a condo, don’t forget that condo fee as part of your overall expense. Lenders that provide financing for these homes don’t overlook that fee. Speaking of financing, it’s important to know that FHA and VA loans are often not available for many condominium complexes, so be sure to check with your Realtor® if you’re thinking about obtaining financing for a condo.

I’ve often heard it said that it’s harder to sell a condo than a single-family home, but is that the truth? When I looked at the data from Deland down through Lake Mary on the north side of Orlando, it took a median of 17 days to get a condo under contract in the last 180 days. When I used the same criteria for a single-family home, it took TWENTY days! The data here says that condos sell FASTER than houses. Now, I’ll say that this may not be the case in every situation, but a properly priced home is still selling quickly. I don’t care if it’s a condo, house, or a cardboard box for that matter! I still love my single-family residential home, but a condo may not be as bad as I’ve thought.

If you’re considering buying or selling a condo or a single family home, give us a call and we’d be happy to help.

Published on September 28. 2023 / Tags: Central Florida Real estate, Condominiums, Houses or Condos / no comments.