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What Is a Condo? Condo vs. Apartment vs. House, Explained

September 30, 2020

what is a condo


Table of contents: 

  • What is a condo?
  • How condos work
  • How much are condo fees?
  • What is an assessment?
  • Condo vs. apartment: What’s the difference?
  • Condo vs. house: What’s the difference?
  • How to buy a condo
  • Questions to ask a condo board


What is a condo?

What is a condo? Short for “condominium,” a condo is a private residence within a larger building or complex.

The first condo in the United States was built in Salt Lake City in 1960, according to Matthew Gordon Lasner, author of “High Life: Condo Living in the Suburban Century.” Since then, this residence style has truly taken off. Currently, there are approximately 17 million privately owned condominiums in the U.S.

Condos might look like a lot of other types of real estate you may have heard of—like apartments, co-ops, or townhouses—but condos have their own distinct features, rules, pros, and cons. Here’s what condos are all about, and how they’re different from other structures in which you can live.

How condos work

Since a condo is part of a larger residential structure (although “detached condominiums” also exist), condo residents typically share certain common areas and amenities with their neighbors.

So what does this mean for a condo owner? It means you and your neighbors might park in a common parking lot or garage. You might use the same rec room or roof deck, or bump into one another at the condo complex’s swimming pool or gym.

Furthermore, these shared areas and amenities are enjoyed by all condo members without the need to maintain them on their own. Instead, condo owners pay dues to a board (typically made up of elected condominium owners) who then handle the hiring of landscapers, pool cleaners, and other professionals for anything that must be maintained or fixed, from faulty elevators to gopher infestations in common areas.

How much are condo fees, and what do they cover?

Average condo fees range from around $100 to $700 per month, although these fees can go much higher based on what amenities they cover. If the condo complex has high-end shared features such as a swimming pool, gym, and spa, condo fees can be several thousand per month.

what is a condo
Some condo complexes come with swimming pools.

typhoonski / Getty Images

Generally, condo fees pay for the maintenance of any amenities outside your personal living space that you share with your neighbors.

“Condo fees are your percentage share of the costs to run the building as a whole,” explains Janice Pynn, president of Simerra Property Management.

And in case you think your condo fees are too high, know this: No one pockets a cent of your checks or is getting rich off condo dues.

“They are not a profit source for building management; in fact, each building is registered as a nonprofit corporation,” Pynn points out. In other words, these fees go solely toward enhancing the value of your real estate, which is a good thing!

Here are the services and amenities you can expect your condo fees to cover:

  • Interior maintenance: Condo owners share the cost of maintaining common building areas like parking structures, storage rooms, laundry rooms, game rooms, fitness centers, saunas, and hallways, as well as mechanical systems like heating, cooling, electric, gas, plumbing, and elevator maintenance. If a crew comes regularly to clean the common spaces, its fees are also included.
  • Exterior maintenance: Condo owners also share the cost of exterior common areas like fences, walls, gates, pools, landscaping, and window cleaning, and seasonal expenses like snow removal, winterizing, and cleaning out rain gutters. If a gardening crew comes regularly to take care of the landscaping, its fees are also included.
  • Security: This could range from cameras at the entrance to full-time guards patrolling the grounds. If visitors have to be buzzed in to the building, this system will be covered by your condo fees.
  • Utilities: Most developments’ condo fees cover utilities such as water, sewer, and trash. Some buildings even include heat, electricity, cable, and Wi-Fi. Remember that the more utilities covered, the higher your condo fees will probably be.
  • Insurance: Most condo fees include a homeowners insurance policy that covers exteriors and shared common areas. Depending on where the condos are located, the insurance policies might also cover flood and/or earthquake damage. The nice thing here is that condo owners need only to purchase insurance policies that cover the interior of their home and their possessions.
  • Reserve fund: There are expenses that don’t come up on a monthly, or even an annual, basis that will need attending to, so a well-managed condo board will charge owners a certain amount per month that will go into a reserve fund. It would cover things like paving, reroofing, replacing water heaters, exterior painting, hallway and lobby flooring and redesign, and more.

What is an assessment?

In addition to your monthly condo fees, special assessments might arise. Every once in a while something big (e.g., a roof or an elevator) gives out, and there aren’t enough reserve funds to cover it. In that case, the condo owners will have to pay an extra fee for these additional expenses, typically tacked on to the usual monthly condo fees in small amounts until the assessment is paid off.

At times like these, it’s best to remember that, as with any type of homeownership, unforeseen expenses arise, and making the necessary repairs is in your best interest. In other words, you get out what you put in.

In addition to collecting dues, a condo board also enforces rules and regulations that owners agree to abide by when they purchase their condominium. The board can regulate everything from the size and number of pets you’re allowed to the ages of the people living in your unit. Retirement condo communities, for example, can legally require that all long-term residents be over the age of 55.

So if you’re looking into buying a condo, make sure to study up on the condominium association rules (called covenants, conditions, and restrictions, or CC&Rs) and fees.

Condo vs. apartment: What’s the difference?

While condominiums and apartments might look exactly the same—a residence in a larger building—the key difference has to do with who owns the property. Condos are homes you can buy, own, and sell when you wish. Apartments are places you can rent, but do not own.

Another key difference between a condo and apartment has to do with property’s maintenance and repairs. With a rental, the apartment’s owner—often called a landlord—is typically responsible for any maintenance and repairs inside the unit as well as out. So for instance, if a renter’s faucet drips or they’ve got pest problems like mice or roaches, all they need to do is call the landlord to come fix the problem.

Condo owners, in contrast, are responsible for any repairs or maintenance inside their unit.

Condo vs. apartment: Which is better for you?

Whether you should buy a condo or rent an apartment can be a tough decision, since each scenario comes with distinct pros and cons. For instance, renting an apartment is great if you’re not sure how long you’ll stay in the area, or don’t want the hassles of maintaining your residence.

Buying a condo, however, makes more sense if you plan to stay in an area for at least a few years, and are willing to maintain your property (by paying repair professionals or by doing the work yourself).

Here are some other factors to consider.

  • Cost: Condos are meant to be purchased. Even if you get a mortgage, condos will typically require a down payment (typically anywhere from 3.5% to 20% of the price of the property). If you lack a chunk of money to offer upfront, then you’ll probably have to rent, which typically requires lower upfront costs (like first and last month’s rent and one month’s security deposit). That said, depending on the inventory available in a particular area, the monthly costs of renting vs. owning could be similar. As such, it’s worth comparing these two options with an online rent vs. buy calculator.
  • Home equity: Probably the main advantage for being a condo owner over a renter is that condo owners gain equity in their real estate over time. As they slowly pay off their mortgage and owe less on their property, they own bit more of their condo free and clear, month by month. Once the mortgage is fully paid off (which can take up to 30 years), they own the property in full. This is in stark contrast to renting, where you pay your landlord rent every month but do not gain equity.
  • Freedom: Condo owners are able to make changes to the property from painting the walls to renovating the kitchen. Meanwhile, renters are not allowed to make any permanent changes without their landlord’s permission.
  • Housing quality: Since homeowners tend to care more about their property than renters, condos tend to be better built and maintained than rentals.

Condo vs. house: What’s the difference?

But what if your real estate debate is whether to buy a condo vs. house? Take a look at the differences between these two popular residential options, and the benefits each can provide to you and your family.

  • Price: Condos are usually more affordable than a house, and are thus great starter homes for younger home buyers. To figure out how much you can realistically spend, try using an online home affordability calculator.
  • Location: If you want to be in the heart of the city, condos will be more prevalent. Single-family homes at around the same price could be found, but likely farther out from metro centers, which might entail a longer commute.
  • Privacy: Having complete privacy is possible in a single-family house, while condo living means neighbors will be quite close. Condos may not offer private outdoor space.
  • Freedom: Many condo communities have strict rules about everything from paint choices to the hours when you can take out your trash cans. As a result, a condo complex isn’t a great idea for fiercely independent homeowners who don’t want anyone telling them what they can and can’t do with their property. Single-family home communities tend to be more lenient.
  • Maintenance: With a house, the homeowner will have to take care of any maintenance, whereas condos include maintenance fees that cover landscaping and (sometimes) exterior maintenance on the unit. As such, condominiums are often ideal for people who want to own a piece of real estate but don’t want to worry about yardwork and repairs.
  • Budget: How much do you want to spend on the property? Condos are usually more affordable than a house. Give this point considerable thought. The last thing you want is to overextend financially. Try using an online home affordability calculator to help pinpoint a budget.

How to buy a condo

what is a condo
Condos are often more affordable than houses, which attracts first-time home buyers.

ablokhin / Getty Images

We totally get why people buy condos: They’re cheaper and require less maintenance than a traditional house (no mowing the lawn). Plus, they’re often stacked with cool common amenities from pools to gyms. What’s not to love? Yet while condo living might seem carefree, buying one is not necessarily a simple task.

Here’s how to buy a condo, how it’s different from buying a house, and a few insider tips to pave the way to ownership.

Consider your unit’s surroundings

While the condo unit itself is a key consideration, it’s also important to carefully check out the environment around it—particularly when it comes to noise. Remember, you’ll be sharing walls with your neighbors, and perhaps even ceilings and floors.

“I always suggest my buyers book a showing during typically ‘louder’ times of the day, such as dinnertime when kids are home, to see how well the walls actually dampen the noise,” says David Nelson with the Imperial Home Team in Minneapolis. He also recommends asking a few of the neighbors about general property noise, such as how loud the traffic and surrounding neighborhood are, and if they can hear their neighbors through the walls.

The unit you choose can play a large role as well.

“End units share fewer walls than those in the middle, which can lessen neighbor noise,” says Nelson. Of course, that’s also one of the reasons why end and top-floor units are more coveted—and often pricier—but if you’re sensitive to noise, that could be money well spent.

Check out the condo board and association

When you buy a condo, you’re buying into the entire community—including its rules on everything from when and where it’s OK to let your dogs off the leash to whether RVs are allowed in your driveway. Most states will have a designated rescission period to peruse relevant documents. During this period, you’ll want to carefully read through the community’s covenants, conditions, and restrictions, or CC&Rs, as well as penalties for not following them.

“When a buyer agrees to the association documents, he or she is automatically bound to the condo board’s rules,” says Nelson. These typically entail parking space allowances, regulations related to pets, and homeowner responsibilities for repairs and maintenance.

“If there is something in the association bylaws that you as a buyer don’t agree with, and it is still within the rescission period, you can back out of the home purchase and usually get a full refund of any earnest money,” says Nelson.

Prospective condo buyers should also do their due diligence on the condo association’s finances, because this will affect your odds of getting a loan (more on that next).

Secure condo financing

In some cases, it can be trickier to secure a mortgage for a condo than a traditional home because the health of the condo development hinges on multiple owners paying their bills. Your mortgage lender is apt to conduct a thorough review of the condo complex as a whole, including documents relating to the overall health of the building and the condo association. The good news is that you can consider this an extra layer of due diligence to protect your own investment.

Prep for your condo interview

Sure, you’re checking them out, but they’re checking you out, too. Once your offer is accepted, many condo associations require prospective buyers to interview with the condo board. Don’t worry: These interviews must comply with all regulations against unlawful discrimination—the goal is to ensure that you can afford the home and fully understand condo rules. This is also your chance to ask questions about any of those rules, and also get a feel for some of the people you’ll be living with—so consider it less of a firing squad and more like a first date.

Questions to ask a condo board

“One of the biggest considerations when purchasing a condo is who manages it,” says Nelson. That’s why, before you sign on the dotted line, you should arm yourself with these questions for the condo board to make sure it’s the right fit for you.

  • What are the fees? Most condos have a monthly fee that can range from $200 to $400 (an upscale development with tons of amenities will cost more). Ask the board exactly what that fee covers—after all, you’ll be shelling out month after month, and year after year. What’s usually included is anything outside your condo, from cleaning public areas to removing snow to maintaining the community pool. Owners themselves generally pay for whatever is inside the walls of their condo, like painting and appliances. Make sure what you’re getting is on par with what you’re paying for, says Nelson. And always ask if the board sees the fee rising anytime in the near future, and how much it’s risen in the past.
  • Can I see the financial statements? A condo’s financials should be an open book (or, more accurately, a spreadsheet). And don’t worry if you’re not an accountant. You should quickly be able to determine if a condo’s income and expenses match up—a red flag would be more money going out than coming in. Also eye the condo’s reserve funds to see if it’s healthy enough to cover any unforeseen expenditures. If not—and the pool pump breaks—that could result in more money coming out of your pocket to fix the problem via an assessment (see our next point).
  • Are there any upcoming assessments? Assessments are periodic, one-time payments made to the association above and beyond the monthly fee, usually to cover capital improvements or repairs. So if the association plans to replace all the windows in the common areas or add a gym, you could end up blindsided by a huge extra bill—unless, of course, you ask ahead of time.
  • What are the rules? Each association has its own unique bylaws and regulations, which all buyers should review before their purchase, as they have to live by them afterward. So make sure you read every single one. Many of the rules are mundane, dictating where residents or guests can park. But some condos have rules that can range from no holiday decorations on your front door to limits on hours for barbecuing. Another biggie in condo rules is whether a homeowner is allowed to rent out their home, and for how long. While you may not want to rent it out, the ability to do so—or not—could affect your resale value. Did we mention that you should read the rules? Read the rules.
  • Are there any pending lawsuits? Lawsuits are a potentially huge financial drain on any condo board that loses in court. And even if there are no pending suits, a quick check of a condo’s liability insurance to make sure it’s up to snuff can’t hurt.
  • Who is the caretaker? Properties generally have a manager on-site to oversee day-to-day tasks. An employee who has been with a condo for a long time is generally a good sign your calls will be answered in case a maintenance issue pops up.

The post What Is a Condo? Condo vs. Apartment vs. House, Explained appeared first on Real Estate News & Insights |®.

How Motherhood Completely Overhauled What I Want in a Home

May 8, 2020

SDI Productions/Getty Images

Motherhood can bring so many changes—not only to your relationship, career, and life in general, but also to what you look for when shopping for a home.

I should know: Six months ago, I moved from Los Angeles to New York City for my husband’s new job. While I was excited to dive into life in the Big Apple—and find a quaint apartment in a hip neighborhood—those plans changed dramatically when I discovered I was pregnant.

Almost overnight, my short list of pre-pregnancy home must-haves (a building with character that’s near fun wine bars) had to be tossed out. I suddenly went from being the easiest home shopper, just looking for a cute place to drop my coat, to having more requirements than I ever would have imagined, from a bathtub to a good school district.

And although we’d settled in our rental apartment before the novel coronavirus hit in the middle of my pregnancy, I saw my requirements for a home become even more stringent in its wake. While I wasn’t about to pick up and move again given that we’d just settled in, this will no doubt affect what I look for if we ever decide to buy a place, or move to a larger rental elsewhere (more on that below).

And I doubt I’m alone. When looking to rent or buy a home, many people might be surprised by how much their priorities in real estate morph overnight once they’re expecting. To help them prepare for this seismic shift, here’s an up-close and personal peek at how pregnancy changed how I shopped for a home, and where I wanted to live.

I learned to look closely at listing photos

I can’t count how many apartments I walked into, turned around, and walked right out. If you’ve ever shopped for a home, you know that listing photos can be deceiving. In a big way.

Not only were these tours often time-wasters, but in that early stage of my pregnancy, I was exhausted and sick all the time. It was hard to get out of bed most days. So a bad tour was a big blow.

In order to save time and energy, I started getting better at analyzing listing photos online. I learned to be wary of photos taken from a weird angle, because I learned that probably meant the room was small and the photographer was trying to compensate.

Photos like this make a room look deceptively larger.

I started looking for how much of the floor I could see in the bathroom photos, realizing that the more floor was shown, the bigger the room probably was. Was there a photo of only the sink? That tended to mean the bathroom was tiny.

I also realized that as my belly grew, I’d probably want a bathtub to soak in. So those shower-only bathrooms I saw in so many apartments probably weren’t going to work for us.

My husband loved the style of this bathroom, but I didn’t like its lack of a tub.

Jillian Pretzel

I also started depending more on floor plans and square footage numbers than actual photos. I’d flip through a profile online and, if it didn’t have a floor plan, I’d wonder if they were hiding something. Usually they were, and usually it was a distinct lack of closets.

With a baby on the way, I needed a closet. Or three.

Location is still everything, but in a different way

Location can be a big factor in home shopping, especially in a place like New York City. There are so many different neighborhoods with different personalities. Originally, I wanted an apartment in a busy, but charming, part of town that would give me that big-city feel.

But after learning of my pregnancy, my ideas of the perfect location changed swiftly. I no longer wanted to be in a bustling area, because I knew that would mean extra noise. I no longer cared about being near fun wine bars or coffee shops, since I couldn’t drink wine or (much) coffee.

There were school districts to consider, wide sidewalks for pushing a stroller, plus proximity to doctors’ offices.

Plus, in a post-coronavirus age, there’s also delivery services to consider. I already knew that walking to the grocery store while pregnant would be tricky. But trying to go to the store while pregnant, during a pandemic, would be downright unsafe. It’s a good reminder of just how important it is to be not only close to grocery stores and pharmacies, but also within delivery range.

Old buildings can have unexpected dangers

Back in California, there aren’t many old apartment buildings. I can think of some “historic” apartments in Los Angeles, which were built in the 1950s. Meanwhile, New York City has plenty of apartment buildings that were built at the turn of the century. The past century, that is.

Most of them are old buildings that I loved the look of, but worried about living in. The reason: Some old apartments were built with lead pipes or covered in lead paint.

Of course, plenty of those buildings have been refurbished and had the lead removed,  but not all of them. And even though their old walls may have been painted over plenty of times in the past few decades, a lead layer could still be buried underneath. A scrape on the wall might expose this toxin that could then find its way into a toddler’s mouth.

While I knew that plenty of families were living happily and healthily in old buildings, I decided not to risk it—and to start looking exclusively for newer buildings.

Here’s a bathroom from one of the apartments we saw after learning I was pregnant. I knew that tile would never look clean.

Jillian Pretzel

Stairs are a big turnoff

I’ve always been an active person. I love working out and am almost always up for a walk, a hike, or a kickboxing class. During my first week of home tours, I didn’t bat an eyelash at the idea of a five-story walk-up.

But now, walk-ups weren’t for me. An elevator became a must—not only to help me avoid too many stairs in the last months of pregnancy, but to avoid lugging a stroller up and down later.

A safe and convenient kitchen area

Of course, we’d all like a large, open-concept kitchen with a big island and top-notch appliances, but that’s not always possible. With a baby on the way, I had to focus my priorities on safety, storage, and convenience.

I saw plenty of kitchens like this in Manhattan: small with no oven, a hot plate instead of a stove, and no counter space. Hardly ideal for a family of three.

Jillian Pretzel

Some kitchens were way too small for a family, and I realized that closed-off galley kitchens might get too tight for my growing belly. I found that the look of the kitchen was often the deciding factor for whether or not we’d tour a home.

I loved this updated galley kitchen but was worried about having enough room between the two of us (plus my growing belly).

Jillian Pretzel

We became more budget-conscious than ever

Looking for a home while pregnant made my list of must-haves much longer. But it certainly didn’t extend my budget. In fact, my husband and I felt we should try to be saving more, because life was about to get pretty expensive. Because of this, it took us extra time to find a home.

After a month of living in an Airbnb rental followed by a few weeks staying at a cousin’s place, we finally found it: an apartment that was truly baby-friendly. It was hard to go that long living out of suitcases, but the lengthy search was worth it.

living room
My studio may be small, but it’s functional and comfortable.

Jillian Pretzel

My bathroom is clean and modern, and has a tub!

Jillian Pretzel

Addendum: How the coronavirus changed my priorities, again

Although we’d already settled in to an apartment by the time the coronavirus tore through New York, I noticed that enduring this pandemic while pregnant changed my priorities in what I wanted in a home yet again. Life in quarantine taught me that there are a ton of things to consider when it comes to staying home with your young family for long stretches of time.

One obvious thing to consider would be outside space. While I never liked the idea of yard maintenance, kids need some time outside. If a pandemic ever pops up again, or even if there’s a bad flu season one year, a big yard or a sizable balcony could be a home’s best asset.

And if outside play isn’t possible due to bad weather or otherwise, I realized I’d want a decent-size play space inside. Being inside all day, a little one would need space to stay active. Granted, such a space would fetch a premium in New York City, but would be doable if you looked for open floor plans where there’d be room to set up a mini slide, ball pit, or safe climbing structure like a Foamnasium (yes, that’s a thing).

Who knows? Maybe I’ll get to put these latest lessons into practice if we decide to move a year or two down the road. For now, I’m happy where I am.

living room
Here I am relaxing on my new couch after hanging some photos on the wall.

Jillian Pretzel

The post How Motherhood Completely Overhauled What I Want in a Home appeared first on Real Estate News & Insights |®.

What Is a Multifamily Home? Owning Many Units Can Lead to a Steady Cash Flow

August 3, 2018

what is a multifamily home?


Have you ever thought of investing in a multifamily home? Unlike single-family homes, these are dwellings with more than one unit that each have their own bathroom and kitchen.  Interested in how this type of property could pay off for you? Read on for our breakdown of multifamily homes, including how to find them in your area.

Benefits of buying a multifamily home

The most attractive part of investing in and renting out a multifamily home is the steady revenue stream you can get from collecting rent. Most people living in a multifamily home are looking to offset mortgage payments by using the income from renting out the other unit, says Lee Kiser, principal and managing broker at Kiser Group in Chicago.

There are also tax advantages to buying a multifamily home. You can write off expenses related to your rental income and deduct the prorated portion of the mortgage interest.

Also, an owner-occupied property may be a wise choice for homeowners living with members of their family, such as their adult children or elderly parents. They can live in one of the units for a period of time and not have to fork over all their savings on rent or a mortgage.

How to find multifamily homes

Searching for available multifamily homes is simple. You can find multifamily homes through a search tool like and filtering by property type. That’s a good place to start to see what’s available in the town you’d like to buy in. Additionally, Kiser suggests checking with commercial brokers. They offer more multifamily investment possibilities.

If you think you could benefit from an expert’s opinion, Carol Greeley, a real estate agent in the greater Boston area, suggests you find a buyer’s agent.

A buyer’s agent helps guide you through the search and helps you round out your house wish list. They’ll also advise you on how to submit an acceptable offer. And since the seller pays the real estate agents’ commission fees, it’s virtually free for you.

Multifamily home as an investment

Just like any new home, a multifamily home may be move-in ready, or it might be a serious fixer-upper. Before buying a multifamily home, you should perform due diligence and assess just how much money you’ll need to put into sprucing up the units. Make sure the home has a sturdy roof and structure, and all major systems like plumbing and HVAC are in working condition.

Susan Haas, a real estate agent at Joyner Fine Properties in Richmond, VA, suggests getting quotes from contractors on any work that’s needed before making an offer on a home.

If anything is out of order, you’re looking at a project that will cost upward of a few thousand dollars. For example, a new roof for a standard ranch-style house will cost around $5,000 to $8,000 on the low end, according to

Also, remember that you’ll likely need to perform work on the units before opening the doors for prospective tenants. A newly renovated home will attract more tenants and allow you to charge higher rent in the long run.

How much for regular upkeep?

The initial renovation costs are just the beginning; once you have tenants you’ll have to deal with maintaining multiple kitchen and bathrooms.

Kiser says a good rule of thumb is to expect $300 to $500 worth of annual home improvements for each unit. So, a multifamily home with three units will cost between $900 and $1,500 annually for regular home improvement tasks.

Of course, being handy can save money. Landlords of smaller multifamily homes may opt to perform basic maintenance tasks themselves instead of hiring someone like a plumber or painter. Some renters are cool with that, but others may prefer you hire a professional to take care of home projects.

The post What Is a Multifamily Home? Owning Many Units Can Lead to a Steady Cash Flow appeared first on Real Estate News & Insights |®.