Best Value: Condo Or House?
Posted by David Rosenfeld on Oct 19, 2012 - 3:00:27 PM
LOS ANGELES—Finding the right home is always tough. So it’s not surprising that many homebuyers are often divided about whether a condominium or a house is the best buy.
The answer, of course, is it depends. If you’re a homebuyer, you must ask yourself, what is your lifestyle? And what are your family’s needs? If you’re an outdoors person who needs to see trees and shrubs and needs room to play with your children outdoors, then condos may not be for you.
Condos have lots of living space, but not much when it comes to outdoor space. Often, common areas are communal and not under your control unless you’d like to reserve the pool area or other area, for instance. So, it’s a trade-off between the large living space and almost no outdoor space.
Even if you have children, it’s not a bad idea to live in a condo without a backyard if it means them going to a better school district with better teachers. With nearby parks, school gyms, and other facilities nearby, not having a back yard is a non-issue for children who would gravitate to these places for the chance to join their friends and others in various activities.
Single family homes, however, have more outdoor space, and they also give you more privacy that you may not enjoy as much in a condo where you would likely have neighbors on the other side of a wall or just above you on another floor. In a house, you could spend months without even seeing your neighbor and you don’t have to worry much about loud music from a neighbor that may be on the other side of a block wall or fence.
Single family homes have the advantage of appreciating the property compared to condominiums. Because of the larger size of the property, which includes the land with likely front and back yards, a single family home will always have a higher value than a condo.
Condominiums, however, will also be more affordable than a house. You can buy a three-bedroom condo for the price of a two-bedroom home, with greater living space and in the neighborhood you prefer. So for value of cost per square foot, you can’t beat a condo.
But condos also have a monthly homeowners fee and sometimes random assessments for major repairs such as repairs to roofs, installation of new water lines, or other costs that could run into hundreds of dollars for a one-time assessment. I always recommend you set money aside so that when these assessments come up, you’re able to pay them. Unfortunately, some condo owners are not well-capitalized and are unable to pay these fees that could result in liens or court judgments.
But the advantage of condo living is that when major repairs are needed, the homeowners association takes care of it. A home owner doesn’t have anyone to fall back on when costly repairs are needed. Such repairs include expensive re-piping or water damage to walls and ceilings; the homeowner bears the entire cost.
Ultimately, you must also understand whether you’ll be spending much time in the home or not. If you decide to buy a house and you don’t spend much time there because of your traveling schedule or other issues, it may be best to buy a condo. The same is true if you don’t entertain much and don’t generally have many people over to visit. Thus you’d have little need for a lot of living space.
Whether it’s a condo or a house, the final decision will depend on your family’s needs and whether your eventual choice will serve them well.
David Rosenfeld is a Real Estate broker and president of Advantage Real Estate, a Real Estate and investment firm in Santa Monica, and a Rotary Club member. He has more than 20 years experience in commercial and residential property investments and financial counseling.