In the booming real estate market, many aspiring homeowners choose condominiums because they are affordable, require minimal maintenance, and can provide nice perks like shared pools.
But the traditional single-family home still has its adherents. Dour inclination towards one or the other may change after you review our answers to frequently asked questions about single-family homes and multi-family homes.
What is the difference between an apartment and a house?
The most significant difference between an apartment and a house is that an apartment is a separate living unit in an apartment building. Houses, on the other hand, are usually self-contained structures, separated from neighboring residential buildings by private property.
Apartments usually share walls with neighboring apartments, as well as some common areas connecting apartments and building amenities (such as a gym). Apartment owners own their individual unit, but not the building in which it is located or the property on which it is built. Traditional homeowners own both the building they live in, and the property on which it is built.
Are apartments cheaper than houses?
Condominiums are generally cheaper than houses, although the price difference varies by geography. This breakdown from Zillow shows that the median selling price of single-family homes in 2019 and 2020 consistently exceeded the value of apartments. An apartment could be a more realistic path to homeownership in a higher cost market.
Tip: Not all condominiums are approved for a loan by the Federal Housing Administration (FHA). For an FHA loan to be insured, a development must have at least 50% owner-occupied units (or 30% for new developments). Learn more about FHA loan requirements for apartments.
Are apartments growing in value faster than houses?
While most condominiums tend to increase in value over time, the same Zillow study mentioned above shows that condominiums don’t increase in value at the same rate as homes – or at least they don’t. increased over the two-year period that Zillow conducted its study (January 2019 to January 2021).
Is it difficult to sell apartments compared to houses?
If your neighbors are also trying to sell their apartment, the similarity of one apartment to another can make it difficult for your apartment to stand out.
One way to increase the chances of your apartment selling is to find an apartment with attractive location in the building. In general, the more bedrooms your apartment has, the easier it will be to sell.
Another tipA: Renting out an apartment can be an option if you’re having trouble selling. But keep in mind that some developments impose rental restrictions.
Read more: Should you rent out your house instead of selling it?
Do condominiums require less maintenance than homes?
Landscaping and snow removal works, roof repairs. Oh my God! The time and money required to maintain a home can add up in ways that surprise new homeowners.
Utility bills are also higher in a single-family home than in an apartment building because you are responsible for more space.
In apartments, as in apartments, residents outsource heavy maintenance work. You’ll pay the toll, but you won’t have to clear the driveway or remove fallen branches after the storm. But minor repairs to your apartment may be your responsibility, so find out what costs you incur.
TipA: A good condominium investment is one where the annual increase in the monthly maintenance fee does not exceed the general inflation rate (about 3%). Otherwise, you may pay more for repairs than you expected.
Read more: How much should you set aside for home maintenance?
How much is the apartment fee? Are they higher than standard HOA fees?
Disadvantages of building maintenance outsourcing? What you save in time, you spend in money.
Condo fees membership fee in addition to monthly mortgage payments. As an apartment owner, you are part of the community – think of fees as membership fees. Approximately, they can cost from 100 to 1000 dollars per month.
Single-family home owners may also be required to pay homeowner association (HOA) fees to cover the cost of shared amenities and services. But apartment fees tend to be higher than regular HOA fees, as apartment owners collectively pay for the repairs and maintenance of their entire building. Single-family homeowners maintain their own homes, reducing overall HOA costs. And while virtually all condominium owners must pay condominium dues, only 53% of homeowners belong to an HOA.
Another important thing to remember about condominium fees is that you pay extra if other members of the community don’t pay their dues. To avoid subsidizing delinquent neighbors, find out how many apartments are managed by the association and how many tenants are paying on time. If at least 97% of residents make payments, that’s good news for your investment. And the more apartments, the more owners take on their share.
Tip 1A: Ask how much money the association has in its assets. reserve fund or repair fund. The association must have an adequate budget for contingencies. In general, a healthy reserve fund is 10% of the annual revenue budget – up to 25% in an older area where renovations are more frequent.
Tip 2A: Before buying, make sure that at least 90% of the apartments in the development are occupied by owners. Solid occupancy means a well-run association (and more contributing residents).
Are apartments more urban than houses?
Since condominiums take up less space than traditional homes, they tend to be located in more urban areas. And city life isn’t just trendy—it’s often quite practical. Whether you work in the city and prefer short commutes, or simply want affordable living close to popular city points such as shops, restaurants, and train stations, finding a comfortable apartment is easier than finding a home.
Some urban planners predict that most of us moving to cities in the future as the population grows. So for a long-term investment, urban real estate is not a bad idea.
Tip: Parking can be a dilemma for apartment owners with cars. Find out if the project you are considering offers parking exclusively for residents and if there is an additional charge. Some developments have parking spaces on a first-come, first-served basis; others may provide seats to residents for a fee.
Do houses offer more space and privacy than apartments?
Homes provide more storage space and room for growth. Objects tend to accumulate over many years in a habitable space. (Just ask your parents). The apartments may have shared storage areas or something similar, but you can’t store things in a non-existent basement. You will learn how to save the space you have, especially if there are children in the frame.
Condominium associations may restrict certain activities such as smoking or even barbecuing on balconies. You are in a common space, which means respect for your neighbors and communication with them. (Of course, homeowners also have neighbors, but not as close.)
Tip: For your own yard, a house is best suited. But for condominium owners, building and area improvements can provide activity options. Your community may have a pool, gym, or recreation center that is covered by your fees.
Obviously, we do not live in an era of good neighborliness: 23% of adults under 30 report that they do not know any of their neighbors.
But the nature of condominiums creates regular socializing opportunities—mail pickup, laundry, etc.—that are not easy to find in a single-family home. Some complexes may also host social events for residents.
Condominiums can also provide security in quantity; getting to know your fellow villagers means you have someone to turn to if problems arise.
Do homeowners have more control than apartment owners?
Communities come with rules. While a homeowner can renovate their property when and how they want (for the most part), apartment owners have limits on what they can and cannot do.
Before changing the appearance (and sometimes the interior) of an apartment, you need the consent of the association, even if you are the owner of the property.
All apartment owners participate in decision-making processes that affect the group. Penalties for violation of s. covenants, conditions and restrictions (CC&R) may include fines or a request to leave.
TipA: Ask about restrictions before buying an apartment. What rules apply to common areas? What is the procedure if you want guests? Are pets allowed?
Who should consider buying a private home?
Big families
Single-family homes tend to be more spacious than apartments and may be a better housing solution for families of five or more.
real estate investors
Condominiums can be harder to sell than traditional homes, and while they typically increase in value over time, they appreciate more slowly than single-family homes.
Who should consider buying an apartment?
First time homebuyers
Because condominiums are generally available at a lower cost than single-family homes, they can be a more realistic first property.
empty nests
Those who want to reduce their living space should find plenty of cozy options among the apartments. Shared common areas in apartment buildings and community events can also be socially beneficial.
Service vs.
External maintenance of apartments is carried out on the side. Since apartment owners are responsible for less maintenance, they of course pay more. But it is the preferred option for many who prefer to avoid manual labor.
Summary
Your preferences for space, privacy, geography, and community life can determine whether you’ll be happier in a single-family home or a condominium. No matter what, make sure you ask all your lingering questions before signing on the dotted line.