With housing costs on the rise and homeownership down, it’s hard to imagine owning a house of your own even in just the next five years. Despite feeling like homeownership is impossible, you should know that it’s not, especially if you’ve made your wealth in a tech startup.
Condominiums, commonly referred to as condos, are becoming an increasingly available option for trading in the fast life of renting for the stability of property ownership. You want a place to call home, permanently, and you don’t want to worry about your greedy landlord trying to profit off of your hard-earned money by raising the rent or charging you an exorbitant parking fee. If you’re one of the many people searching for a practical, stable, long-term investment, you’re likely thinking about buying a place to call home. The question now is, what’s the better investment: a house or a condominium?
Benefits of Purchasing a Condominium
–Purchasing a condo is less expensive. According to Amy Tierce, the regional vice president with Wintrust Mortgage in Needham, Massachusetts, you will spend less on a condo purchase “especially in higher markets where condos can be the only alternative to high-priced, single-family homes.” Though keep in mind that you will still need to pay other costs, such as water and trash services, not to mention condo homeowners insurance.
–Easier to maintain a compact space. Property ownership comes with its own share of struggles, such as landscaping and repairing defunct appliances that could end up costing thousands of dollars to replace out of pocket. In an interview with Bankrate, real estate agent Jordan Clarke expressed that for first-time homebuyers, “a condo or townhouse may be [a better fit] because association fees cover maintenance and repairs. Owners of single-family homes have to set aside money for those purposes.”
–Stronger sense of community. As opposed to homeowners, condo owners tend to live in tighter quarters. Though this may initially sound like a disadvantage, it actually builds a stronger sense of community between neighbors. Condominium dwellers are more likely to work together to build community within the complex, opening up communication between neighbors and making the space more inclusive and cooperative.
Benefits of Purchasing a Home
–More space equals more privacy. Unlike living in a condo, where spaces between each dwelling are relatively small, living in a house affords you more space, particularly if you live on a piece of land or in a cul-de-sac.
–Houses generally increase in value over time. If you own a home, you build up equity over time. Home equity “is the value of ownership built up in a home or property that represents the current market value of the house less any remaining mortgage payments. This value is built up over time as the property owner pays off the mortgage and the market value of the property appreciates.”
–Homeownereship garners you a tax cut. According to the ARAMCO Group, the federal government lets you deduct interest from your mortgage payments on your annual income tax return. Who doesn’t love a tax break?
Condo ownership or homeownership, It really doesn’t matter; it’s really about your personal preferences and where you are in your goal list. To help you figure out which would be better for you and your situation, ask yourself these questions
- Do you want to own a condo or a home?
- Which is more cost-effective in the area you live?
- How long do you want to live in the area?
- Do you want to own property?
- Do you want to belong to an HOA?
- Do you want to have neighbors?
- Do you want to be an active member of your community?
Once you have your answers, you’ll know what to do.