Did you know there are over 5 million condominium households in the United States?
This can only mean one thing: millions of people love condo living, and for good reason. Living in a condo gives you the opportunity to live in an established community where you can easily access recreational facilities such as fitness gyms, swimming pools, and tennis courts. It’s also much easier to clean and maintain a condo compared to a standalone house with a garden and a driveway.
But there’s one big decision to make: should you rent or buy a condo?
This is a common conundrum among people who want to experience the joys of condo living. In this article, we’re sharing the pros and cons of either option. Read on so that you can make an informed decision.
Renting a Condo
Renting a condo effectively makes you a tenant. You’ll pay rent, typically on a monthly basis, to the owner of the unit, which could be an individual owner or to a property management company.
Renting a condo has its advantages and disadvantages.
Financial Flexibility
Whether you’re renting a condo or other type of residence, there’s no doubt this option gives you a lot of financial flexibility.
In 2021, the median cost of a condo is about $280,000.
If you’re anything like most people, you don’t have the money to make a condo purchase in cash. But there’s the mortgage option, right? First, not everyone qualifies for a mortgage. Perhaps your credit score is not adequate or your income isn’t steady enough. And even if you qualify for a mortgage, you have to pay a deposit, which can be up to 20 percent of the purchase price.
If you aren’t in the position to afford a condo, you don’t have to give up on condo living. You simply need to rent it. As long as you can afford the security deposit and the monthly rent and any other additional fees, you’re good to go.
No Maintenance and Repair Headaches
As a condo tenant, it’s your landlord’s job to take care of the property’s repair and maintenance needs. If there’s a problem with the plumbing or the air conditioning, for instance, you’ll only need to alert the landlord or their property manager so they can make the repairs.
You Can Move Whenever You Want
Renting affords you plenty of flexibility in your life.
If you’re the adventurous type who wants to experience life in various cities, renting is the perfect option. Once you’re tired of living in a certain location, you just need to move out and hunt for a condo in the location you’d like to move to. What’s more, the landlord will return your security deposit.
If you’re in the workforce and you’re likely to be transferred or you think that you’d find another job in another city in the future, renting is the better option.
You Don’t Get the Full Sense of Belonging
It’s hard to think of any solid cons of renting a condo.
However, some tenants don’t develop the full sense of belonging that comes with owning a condo – especially if the vast majority of residents in that condo community are owners.
Customization Limitations
As a condo tenant, your landlord may prohibit you from making customizations to the unit. For instance, you might not be able to remodel the kitchen or bathrooms. Even painting the walls in different colors can be prohibited.
Buying a Condo
Buying a condo is pretty much like buying any other type of residential property. You can pay in cash or go in for mortgage financing. You’ll get an ownership deed, but it only proves you’re the owner of the specific unit and not the land on which it sits.
Just like renting, buying a condo has its pros and cons.
Condo Ownership Makes Financial Sense
The average monthly rent is about $1,200. The average mortgage payment is about $1,200.
From a purely financial standpoint, it makes financial sense to buy than rent, especially if you’re comparing to a person who will rent for 20 or more years. So, those payments you’re making to a landlord could be used to offset a mortgage.
Plus, property ownership is a big investment. Over time, the value of the condo could rise, increasing your equity stake. You could sell it at a profit several years down the road.
A Great Sense of Community
Condominiums are usually established in gated communities. There are hundreds or thousands of units, giving residents the opportunity to become part of an urban community. There’s a homeowners’ association (HOA) that takes care of the welfare of the residents.
This feature can add to your quality of life, especially if you’re a social person. And, you can choose to buy a condo in a neighborhood with a vibe that matches yours. This neighbourhood in Toronto, for instance, is ideal for professionals with young families and an eye for luxurious living.
Reasonably Affordable
If you aren’t living in a condo, you’re probably living in a single-family house.
On average, condos are cheaper than single-family homes. So, if you’re keen on owning a residential property but are worried about the cost, you might want to buy a condo. It’s also cheaper to insure a condo compared to single-family houses.
Recurrent Ownership Expenses
On the downside, buying a condo exposes you to some recurrent expenses that you can’t wish off. For example, there’s HOA fees, which every owner must pay on a monthly or annual basis.
You’re responsible for repairing and maintaining your property. If an in-built appliance, like a water heater, breaks down, you’ve to foot the cost of repairing or replacing it.
The cost of repairs in common areas is usually split among the owners.
Limited Flexibility
A condo is an immovable asset. As the owner, it can be challenging to make life decisions, such as relocating. Yes, you can move and rent out the unit or sell it, but this still limits your flexibility. You can’t move out on a whim like a condo tenant.
Rent or Buy a Condo? Your Choice!
So, should you rent or buy a condo?
There’s no one-size-fits-all answer. It all depends on your situation and personal preferences. Renting works for some people the same way buying works for some people. However, one can’t fail to notice the level of flexibility that comes with renting.
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