Why condo

Doormen, swimming pools, dog parks, gyms, parking garages, storage units and security all cost money. The HOA often covers the insurance on the exterior. Bottom line: Just make sure you understand all the costs associated with a condo before buying one.

A detached, single-family home is typically going to be more expensive than a condo for a number of reasons. And when you own a house, you own the whole thing, inside and out. Do you like mowing the lawn?

Property is property, and they assess it that way. But if you own a house , you probably own a lot more property, so expect your property taxes to be higher. Unlike comparing condos and townhomes , which is very much an apples-to-apples comparison, the differences between condo living and house living are much more significant.

Condos are smaller and part of a community. Houses are in neighborhoods, and many new houses are built as part of planned developments that may also come with HOAs. This can be a blessing if the community is well-managed and you like your neighbors. Looking to avoid Mr.

When you own a house, you can put up a No Trespassing sign in your yard and turn the dogs loose when you see this jerk coming. Apartment owners can also share the expense of amenities such as gyms and swimming pools. And those people do much of the management themselves. In co-owned buildings, walls, roofs, parking lots and other common elements technically belong to a special kind of nonprofit, usually a condominium association , run by an elected board of tenant directors who volunteer their time.

This kind of housing also typically keeps costs stable because renters are more vulnerable to inflation and other shifts in the housing market — with some exceptions. These and other savings help explain why apartment ownership has always appealed to Americans living on fixed incomes, such as retirees. This is especially true of those with enough cash to buy their apartments without a mortgage. Retirees selling houses up north — often originally bought with the help of the government through the Federal Housing Administration or GI Bill — moved into Florida condos by the hundreds of thousands between the s and s.

But this kind of ownership brings people together, however begrudgingly. As developers started putting up larger buildings full of unrelated buyers, they began to screen prospective residents by requiring personal references.

Often, that meant keeping out people who belonged to certain racial, ethnic and religious groups — including Jews, Catholics, and Black people. A condo is similar in structure to an apartment — usually a unit within a larger residential building — but condos are owned instead of rented.

The property taxes of a condo are paid by the owner; landlords, rather than apartment renters, pay property taxes for an apartment. Because the structure of condo and apartment communities is similar, they often have comparable amenities and locations. Both kinds of units may come with benefits like a pool, trash disposal, manicured green spaces, on-property gyms and more.

How We Make Money. Jennifer Bradley Franklin. Written by. Jennifer Bradley Franklin is a multi-platform journalist and author, often covering finance, real estate and more. Edited By Suzanne De Vita. Edited by. Suzanne De Vita. Suzanne De Vita is the mortgage editor for Bankrate, focusing on mortgage and real estate topics for homebuyers, homeowners, investors and renters.

Share this page. Key Principles We value your trust. What to consider Cost: The cost of renting an apartment is fairly straightforward. Then, you make monthly payments for the term of your lease agreement. The costs of becoming a condo owner are a bit more involved and expensive. Depending on the mortgage you get, you can put as little as 3 percent down and pay up to 5 percent of the purchase price in closing costs.

Home Ownership Purchasing A Home. Table of Contents Expand. Co-ops vs. Condos: An Overview. The Buyer's Preference. Condos: An Overview Condos and co-ops share similarities but also have unique characteristics that offer a variety of options for residents. Key Takeaways When you buy a condominium, your apartment, as well as a percentage of the common areas, belong to you. When you buy a coop, you don't actually buy your apartment; instead, you are buying shares in a corporation that is your building.

Condo prices are higher than co-ops, but co-ops require a larger downpayment, higher monthly fees, and a lengthy approval process. Condos generally allow subletting of the apartment, while only some co-ops allow subletting, and the rules are complex. Article Sources. Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate.

You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy. Related Articles. Partner Links. Related Terms Condominium Condos or condominiums are housing units in a large property complex that are sold to buyers. While apartments are generally rented, condos are owned. Community Land Trust A community land trust is a private, non-profit organization that promotes affordable housing and community development through land ownership.

Homeowners Association HOA Fee An HOA fee is a recurring fee paid by some homeowners to an organization that helps maintain and improve their property and others in the same group. Landominium Landominium refers to a unit, built as part of a residential development, whose owner owns both the unit and the land on which it is built. A homeowner's association HOA makes and enforces rules for a subdivision, planned community, or condominium building; its members are residents.

Understanding Down Payments A down payment is a sum of money the buyer pays at the outset of a large transaction, such as for a home or car, often before financing the rest. Investopedia is part of the Dotdash publishing family.