You might be considering buying a condo as a first dip into the real estate market. This might be due to the fact that you are just starting out as a family, or you are a student or other younger person who wants to own something, and not just see their money sent off every month towards rent, with no returns at all. On the other hand, you might be an older person whose children have all moved out and who wishes to take advantage of the sale of the family home by moving somewhere smaller and saving the leftover profits from the sale.
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All three situations are common to condominium buyers, but in fact there are quite a few downsides for at least two of the demographics prone to invest in condominiums. Let’s take a look at some thought processes behind condominiums purchases, and what the purchase will look like in reality.
A condominium is similar to a house as an investment, in that it will increase in value.
Condominium mortgage payments are equal to what I would be paying in rent anyway. This preconception about owning a condominium is actually true. The down payment to purchase a condo is pretty low, and there are tax deductions which do not apply to rent. However, you have to keep in mind the association fees which are attached to condo ownership. These fees will rise every year, sometimes dramatically. Moreover, you will pay them for as long as you own the unit.
A condominium will serve as a source of income when I am ready to buy my own house and move out through renting. Again, this idea rarely plays out in reality. Condo owners will be competing against the owner of the building when it comes to finding renters AND buyers.
Condos offer community living without an invasion of privacy. This is true. If you like the idea of living in the same complex with people you establish relationships with, including common area activities, then you might be perfectly suited to condo living.
Condos are easier to upkeep than houses. Also true. There is no need to mow a lawn with a condo, and you don’t have to worry about the heater or air conditioner blowing. Just remember that any job you don’t have to do, someone else will, and they will be paid through association fees.
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