Once you have decided that you’re starting your investment portfolio by buying a property, the next step is to select between a house and lot, or a condo. If you’re still in the middle of choosing between a condo or a house and lot, here are the advantages that condos have when it comes to financial matters as compiled by Financial Web.
#1 Lower Down Payment
First-time home buyers in particular have a challenge when it comes to putting down a down payment. They do not have a previous property sale to supply them with income to do this, and many are young or in the early stages of their careers. As a result, opting for a condo with a low required down payment can make the process more affordable. On the flip side, an older couple looking to downsize or retire will also benefit from a low down payment.
#2 Property Sales Value
The sales value of a condo can be driven upwards due to improvements to and the desirability of the general condo building. As a rule, condos in small buildings are less affected by bubbles and busts in the housing market than are condos in big buildings. However, even condos in large complexes can present great property sales value if there are not many other units for sale at the time you prepare to sell.
#3 Amenities and Benefits
While you do have to pay homeowners’ association (HOA) fees in order to receive many benefits of condo ownership, these fees represent only a fraction of the cost of your total benefits. Financially, the amenities offered by many buildings are a great bargain to individual homeowners.
#4 Lower Utility and Maintenance Fees
The cost to maintain a small property is much lower than the cost to maintain a large property. Even in a relatively large condo, you are not paying for items such as your roof, windows or driveway. While these costs do come out of your HOA fees, you are again sharing the cost with a number of homeowners. Further, it is less expensive to heat, cool, furnish and clean a condo than a large home. This can represent savings that may later be used to purchase a house. Or in the case of individuals looking to downsize, these savings can be spent on living enhancements.
