Buying a Condo: How Does It Work, and Is It Right for You?

Condos can be a great option for first-time home buyers and those looking to own a home without extensive maintenance. Apartment living has its benefits; it's easier to enjoy community life. An apartment is an individually owned unit in a building. When you own a condo, you are responsible for paying the monthly fee charged by the condo association. The association manages the maintenance of all exterior and common areas.

What Are Condos?

Condos, also known as condominiums, are residential complexes in which there are individual units, each of which is owned by an individual. When someone rents an apartment, they rent it directly from the apartment owner.

Apartment owners are responsible for what happens within their respective units, including maintenance and repairs. In addition to this, they are also required to pay a regular fee to the condo association. These fees help maintain shared common areas, building facilities, and the exterior of the complex.

Types of Condos

There are two main types of condominiums: freehold and leasehold. For freehold condos, the unit is fully owned by the tenant. For leasehold apartments, the tenant enters into a contract with the landlord rather than owning the unit.

Condo Home

A standard condo home is a residential property where the owner only owns the portion of the building that consists of the interior of their home. This is in contrast to a single-family home in which the owner owns both the home and the property on which it sits.

Condo Share

Often used as a second home or vacation home, its tenants are assigned a certain number of hours and days per year to use the condo. Condo shares usually have fees such as maintenance and property taxes and are not considered investment properties. These types of units can be difficult to sell but are among the properties that offer an ideal exclusive location during a vacation at resort or hotel prices.

Detached Condo

Detached condominiums offer the benefits of condominium living with minimal maintenance and are planned communities within HOAs. The main difference between these types of condominiums and apartment homes is that there are no shared walls. Instead, a freestanding condo community is located near the city, and units are often clustered together.

Private Condo

Private condos are owned by the landlord of their respective units. Typically, these types of apartments are rented out to tenants, but they are different from standard apartments. The application process, criteria, and deposit for these types of rental apartments may be different.

Condo Building

A condominium building is a complex of individually owned units. Ownership is usually controlled by some maintained HOA or community property management department.

Should I rent or buy a condo?

Determining your budget and financial situation will help you decide whether renting or buying is better for you. In addition, carefully consider the advantages and disadvantages of condominiums.

Advantages of Buying a Condo

The benefits of buying a condo versus renting or owning a single-family home include more amenities, less maintenance, and less burden, among others. Empty nesters looking to downsize their families and seniors who prefer less maintenance may be looking for a condo. Condos can also be a solution for first-time homebuyers looking for their first home in urban areas where real estate prices for detached homes can be too high. Specific advantages are as follows:

• Additional Amenities: Depending on the complex, you may have access to amenities such as a pool, petting zoo, or parking lot. These shared amenities are often maintained by the homeowners association (HOA), so you can enjoy them without having to maintain them yourself.
• Less Maintenance: Condominiums are popular with people who enjoy the freedom of owning their own home but not having to deal with the maintenance that comes with owning a single-family home. If you want to own your own home without having to mow the
• More Affordable: Normally, condos are less expensive than traditional homes, making them ideal for first-time homebuyers with modest salaries. While you do have to consider condo association fees, a condo may be more affordable than a detached home. If you were previously unable to own a home due to high entry costs, a condo may be closer to your price range.

Disadvantages of buying a condo

Like any home purchase, there are some considerations to keep in mind when you want to buy a condo. If you don't want to pay extra fees on top of your mortgage or follow community rules, condo living may not be for you.

• HOA Fees: The condo association will charge a monthly or quarterly fee to cover all common expenses, insurance, taxes, maintenance, repairs, some utilities, etc. These fees may vary greatly depending on the location and size of the condominium.
• Rules and Restrictions: There may be very strict condominium association rules and restrictions. You will find strict rules in the association covenants and restrictions that often limit what you can do to change or personalize the appearance of your unit. You may find that you can't even hang a holiday wreath on your door, all in an effort to maintain a consistent look throughout the project.
• Less Square Footage: Large families or people who enjoy spending time outdoors may feel cramped in their apartment. Most of the time, condo units do not have private outdoor space, and you may have to walk some distance to find a park or playground.
• Less Privacy: Some apartments share common areas and walls. This shared space brings a sense of community, but also a lack of privacy. Shared spaces can have noise issues, and some HOA rules may limit the time guests can stay.

Contact YouLand for help

If financial problems are affecting your plans to invest in condos, or if a traditional bank can't finance your loan, YouLand's bridge loans can help you complete your purchase; or if you want to expand your rental portfolio, YouLand's DSCR loans can help you!

We’re excited to introduce YouLand’s newly launched Point of Sale (POS) system, which makes it easy to submit bridge loan request including bridge, fix and flip as well as ground up construction.Whether you are a loan broker, a loan officer or a real estate agent, you can have a try!