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If you are looking to buy your own home in an urban area, chances are you’ve considered buying a condo. Typically more affordable than a normal home, they are a consistently popular choice, especially among a younger market. However, there are different types of condos, and it’s worth understanding the differences.
Many people think of a condo as an apartment within a block, but there are many other types on the market. Townhouses and even single-family homes are also available for purchase as condos. and work much the same way. These are popular in urban spaces because they offer a more traditional type of house in the city, for a lower price.
In general, the condominium corporation or the owners association will manage the common areas, with each owner paying a fixed monthly fee to cover costs. Common areas vary widely between different condominium complexes, although most include at least one parking lot. Others can include anything from an on-site gym and playgrounds to security services and elevators.
Whether you are considering buying an apartment style condo, townhouse, or detached house, there is two main types of condos to be found; regular and in full ownership. Both have their pros and cons, and your lifestyle will largely determine which one is best for you. Do your research to make sure you know everything about this popular housing option.
When you buy a regular condo, you generally own the interior aspects of your unit. The exterior of the building, the common areas and the land on which your property is built are owned and managed by the condominium company.
You are normally free to do whatever you want with your unit but have no control over the outside, although different complexes have different rules. Instead, you pay a monthly fee and the company takes care of the upkeep and maintenance.
There are many advantages to buying a regular condo, although most of them are circumstantial, and you may find that it is not quite the right choice for you.
- Regular condos can cost tens of thousands of dollars cheaper than freehold condos, creating an affordable option in a popular urban space, and particularly for first-time homebuyers.
- No need to worry about costly maintenance and repairs to things like the roof because the condo company is responsible for looking after those things. In some units, you might not even have to worry about pipes and cables hidden in the wall, as they might not be within the limits of what you have.
- You are normally able to decorate and renovate your unit as you see fit, although there may be some restrictions depending on the individual condominium company.
- To access to common areas and amenities.
- Since the condominium corporation takes care of the exterior, you can be sure that your neighbor’s properties will always look great outside, creating a more attractive neighborhood.
While the lower price is tempting, there are some drawbacks to buying a regular condo.
- You have no control over the exterior of your unit, limiting how much you can make the place your own.
- Some condo companies have pretty strict rules and may even prohibit you from creating your dream home within your unit.
- You still have to pay the monthly condo fees even if you don’t use the common amenities.
- You rely on the condo company to properly manage funds and keep abreast of repairs and maintenance. If mismanaged, you may have to pay expensive one-off charges to cover emergency repairs, called special assessments.
Before going ahead with the purchase of a regular condo, it is worth considering the rules and regulations carefully. Make sure you know the limitations of your unit and the repairs and maintenance covered by the company. Also check the accounts and see how well the funds are being managed and the level of transparency.
Freehold condos differ from regular condos in that when you buy them, you usually also buy the land on which they are built. This means that you have more control over the exterior of your property, but the price will generally be higher.
The cost may be higher, but there are many benefits that can make this investment worthwhile for you.
- Since you own the land, it is a much more valuable investment than an ordinary condo. Anything can happen to a structure, but the land can be reused over and over again. This is especially useful in urban areas.
- You have more control over your outdoor areas as well as the exterior of your building. However, some regulations may be in place, so check first!
- You can still take advantage of the common areas and amenities, but for a reduced monthly fee.
Having control of your own land is great, but buying a freehold condo has some drawbacks.
- You are responsible for the maintenance and repairs of your property rather than the condominium company. This can mean having to foot the bill yourself for expensive roof or window repairs.
- As it is, you can’t be sure your neighbors will keep their property looking its best, which can make the neighborhood junk, a real problem if you want to sell.
- Freehold condos are more expensive than regular condos, so if you are looking for a budget option this may not be for you.
Buying a freehold condo can be a great choice, especially if you plan to sell in the future. They generally sell for a higher price and are currently more sought after in many urban areas of the country because they hold their value better.
If you want to control your own property and don’t want to depend on a condominium company, this is the natural choice.
Before you rush out and buy the first condo you find in your neighborhood of choice, carefully weigh your options and think about what is most important to you. If price is a big factor, a regular condo may be the best option. On the other hand, a freehold condo might be the best option if you are looking for more control and a longer term investment.
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