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Condo or House: 6 Questions to Ask Yourself


When you’re ready to make a move, especially if it’s your first move into homeownership, you may think your budget will go farther if you focus on the condo market rather than on single-family homes. While a condo may very well be the right choice for you, be sure to weigh all the associated factors to determine the most livable housing solution.

How do you decide? Here are six questions to ask yourself as you consider your options.

  1. Is this a good fit for my lifestyle? A condo may offer the added security of knowing that your property is being looked after and maintained in your absence if you travel a lot for work or work long hours.
  1. How much time do I have? Maintaining a single-family home generally requires more upkeep than a condo, like yardwork or other maintenance. Condos have the advantage of reducing your personal responsibility to your space, freeing up your time. In addition, owning a condo can reduce costs since expenses are shared.
  1. Am I okay with the association’s guidelines? Condo boards generally establish rules with the good of the entire association in mind. So, you'll need to decide how you feel about their guidelines—from the rules regarding the use of shared facilities to the size and number of pets allowed. Fortunately, you can view the condo rules before purchasing to make sure a certain building will be a good fit.
  1. Will I use the pool? Many condos offer access to pools and have a fitness center. Having these amenities, along with party rooms, can save you from maintaining outside memberships. However, if these are features you won’t make use of, you may not want to choose a building where you will be paying for them through your monthly assessment.
  1. Are the condo association’s finances sound? Lenders look at more than your finances when you buy a condo. They look at the condo association’s finances as well. In particular, they look at the money reserved to pay for future expenses and repairs. If your lender feels the reserves are underfunded or if there is a special assessment in effect to replenish those reserves, it can give you, as a buyer, more negotiating power on a unit’s price.
  1. Are you comparing the right numbers? When you sit down to compare the costs you would face as an owner of a house versus a condo, make sure you do it on an after-tax basis. While interest paid on a mortgage is generally a deduction for homeowners under current tax laws, assessments are not deductible. On an after-tax basis, you may find that a single-family home may be similar in costs after all, but you should always consult a tax specialist for advice.

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