Buying a home involves a lot of choices—locations, type of home, type of loan, and more. When it comes to the type of home, remember that a single-family home isn’t the only option. Condos can be great places to live, not to mention solid investment properties. That’s because the condo market continues to expand and may increase your options.
Beyond that, we’ve got five more benefits of purchasing a condo. So take a read, then decide whether it might make more sense to buy a condo!
1. Lower Price/Down Payment
Condos can be a more affordable option for first-time homebuyers. In many areas, a condo is priced a bit lower than a single-family home and can offer just as much square footage.
A lower purchase price means a smaller loan and smaller monthly payments, but it also means a lower down payment. And you know what that means: You don’t have to come up with as much cash to move forward!
2. HOA Handles Landscaping/Improvements
Condos almost always have a homeowners association (HOA) that governs the development or complex. There are HOA rules for each condo community that can range from very simple to very elaborate, so it’s a good idea to review them before making an offer.
But by charging a monthly HOA fee, the association typically handles all the outside common areas of the condo complex or neighborhood, as well as large items like the roof and exterior of the property.
This can be a huge relief if you’re a first-time buyer settling into homeownership. Let the HOA fees work their magic! If rest and relaxation are on your weekend agenda, then the HOA fees that come with a condo may be well worth it.
3. Customization Inside
Despite being situated like apartments, you own a condo. That means you don’t need anybody’s permission to paint your interior walls, do light home improvements, or hang whatever you like.
As a first-time homeowner, this can be so exciting!
You may have to check with your HOA’s rules before making larger renovations or doing anything to the exterior of your unit. Your CC&Rs (covenants, conditions, and restrictions) will tell you what is and is not allowed.
Condo ownership gives you so much more control than you had as a renter.
4. Community Amenities
There’s a lot of variation in condo communities, but many offer common areas and amenities similar to those you’d find at an apartment complex.
These amenities might include a swimming pool, clubhouse, fitness room, walking trails, or group recreational activities. You’d be hard-pressed to find a single-family home that had all these extras (though they do exist … for a higher price tag), but condos generally offer amenities that you pay for via your HOA payment.
Some first-time buyers who know they want to hold the condo long-term will even turn these assets into their vacation homes down the line because they enjoy the common areas, amenities, and all the perks that come with the unit.
5. Investment Property Possibilities
Just as condos can be a primary residence or vacation home, they can also be a real estate investment.
When you’re ready to take the next step in your homeownership journey, you can decide whether to sell your condo or turn it into a rental property, adding to your income stream.
Be sure to consult your accountant as you look at how the pros and cons and decide how the income, expenses, and perhaps an investment home loan might work for you.
You’ll also want to check with your HOA’s rules and regulations to ensure that you’re able to rent the condo out for the length of time you desire. For instance, some HOAs are fine with long-term, one-year leases but don’t allow condos to be rented by the day, week, or month (à la Airbnb or VRBO).
Remember, too, that even while your condo is vacant, you still have to pay your monthly HOA fees, so be sure to factor that into your ROI.
Ready to Get Going?
Once you’ve considered all the benefits of investing in condos and asked yourself the right questions, we’re here to help you take the next step.
APM even offers non-QM (qualified mortgage) financing for non-warrantable condos (where there is a lawsuit pending against the HOA—a very common occurrence).
Plus, buying a condo is easier than ever now thanks to new condo approval rules for FHA loans. FHA will now let you buy a condo within a complex that it hasn’t approved yet (aka a “spot approval”).
This means some condos that weren’t previously eligible for FHA financing now meet the criteria. More eligible properties equals more inventory and more choices for you!
And don’t forget the perks of FHA financing, like low down payment options, lower credit score requirements, lower interest rates, and more.
Our APM Loan Advisors can help you get the mortgage process started whether you’re looking to buy a condo or single-family home. They’re also well-versed in all the ins and outs of condo ownership and real estate investment. Give us a call today to get the ball rolling.