If you are a first time home buyer, you’re probably considering which is better for you to buy. Should you buy a house or should you buy a condo? Which is better for you? Over the years, I’ve sold many, many homes and many, many condos. And the buyers decide on buying a condo or a townhouse based on basically three areas of decision making. Number one is the price. Number two is the location, and number three is the lifestyle. Sometimes I’ve also noticed that you may have to decide to buy a house versus a condo specifically based on price because usually condos are cheaper than homes. Or is it specifically based on your location? You may want to buy a condo because there are more condos towards the metro areas and it’s easier for to drive over there every day. So it could be based on that. Or the third is a lifestyle. Do you want a lifestyle of a house where there’s more privacy and more space between homes, or do you want a condo lifestyle or townhouse lifestyle where you are closer to shopping, closer to transport, closer to more people, and you enjoy the community aroma or community lifestyle. So let’s see the pros and cons of buying a house versus a condo.
So I’m going to talk about the pros and cons of buying a house first. Then I’ll talk about pros and cons of buying a condo. So you can make the right decision based on the information you gather from here and I’m sure from some other sources talking about the pros of buying a house, the biggest pros that I feel, based on talking to a lot of buyers that I’ve sold home to and talking to them is that they have a sense of privacy when they buy a house. People feel very congested in the townhouses because there’s homes right next to you or neighbors staying right next to each other, and you are just surrounded by close knit walls. But in a house, there’s privacy. There’s room between the homes. There is a fence. You have a backyard, you have a side yard, you have a front yard, you have street parking. So there is a sense of privacy, sense of calmness and sense of peacefulness.
When you buy a house, a lot of people enjoy that lifestyle. Also, if you have your backyard, you can have fruit trees, you can have your own swimming pool, you can have your own patio or your own jacuzzi and your own landscaping the way you want it so you can enjoy. Maybe you want to have a bench over there. Maybe you want to have a swing over there. Maybe you don’t have a lot of trees there. If you have any kids, they can play with the trees or on the trees. I remember climbing trees when I was ten years old because we had a big yard, and I used to go up the tree and enjoy those moments.
The other significant advantage of owning your own house versus a condo is that you are able to customize the house as you want. In a townhouse, you can do anything outside. You can paint, you can change the windows, you can change the parking, things like that in a house, you can paint the way you want. You can customize your backyard or the front yard, you can add a jacuzzi or a pool or a patio, etc. So you have a lot of room, a lot of flexibility when it comes to customizing the home that you want. These days, especially in Orange county, and I’m hills, Orange county, where I’m from, a lot of the owners who have a big yard are adding ADUs, which is the accessory dwelling units, so that their family members can move in, their son or their parents, or maybe the maid or siblings can move in, or a lot of them are building the ADUs so they can rent it out and make some extra money in a condo, you can do that. So these are the distinct advantages of owning a house.
The other advantage to owning your own house is that homes in general appreciate more than townhouses and condos. So if you buy a house today, let’s say, for $500,000, and it appreciates 20% over the next four or five years, the condos may only appreciate 15% or lower. There is that advantage where you can build higher equity in owning a house than in owning a townhouse.
A lot of the homeowners buy their home because they have a family friendly environment. Like myself, I live on a cul de sac in a house. The advantage is that I can have a lot of parking. So if I have friends and family over, there’s a lot of parking, there’s no parking issues. My neighbors, I know them well. We meet in the weekends, go on the streets. When my kids were young or little, they used to play in the cul de sac street. They used to run around on the streets because the areas are more private, more rural, compared to condos, where the condos are near busy streets or high traffic streets. And the kids may not be able to play on the streets like they could in a housing atmosphere.
Also, if you have children, if you have guests coming over, if you have a lot of people in your family, five or six or seven people or siblings, staying together or when you have guest over friends over in the weekends. You have your own yard, you have your own front yard. There’s more room for people to walk around, spend more time around the house, take advantage of the backyard, the front yard, the side yards. In townhouses or condos. You don’t get that because you basically have four walls and you can’t move around. You may have a patio or a balcony, or you may have to go downstairs in a community room if the association provides a community room. So those are the advantages of owning a home. Of course, there are others, but those are the ones I wanted to talk to you about, because those are the important ones. And those are the ones a lot of the homebuyers decide on whether to buy a house or a townhouse.
Talking about the cons of owning a house is that if you own your own house, you generally have more maintenance costs than owning a condo. If you own a house, let’s say something goes wrong, your fence breaks down, or there’s a leak in the roof, or the trees need trimming, the gardening needs to be maintained. All that cost money where you don’t have those cost in a condo and talking about expenses, there’s maintenance costs. But in general, homes cost you more in general, not only to maintain, but to own. For example, you have to buy your own insurance. There is no roof insurance coverage. You have to get your own. You have to maintain your fences. If you don’t have a fence, and if you need privacy, you have to build your own fence. You have higher utility bills because your area is bigger. For example, generally homes are bigger in area. So the bigger the area, the more utility bills that you have. You use more air conditioning, you use more heating during the weekends or when you’re at home. So all these costs add up compared to a townhouse or a condo.
And one of the biggest disadvantages, and this is one of my things that I hate most about owning a home, is that you have to do your own repairs if something happens, if a roof leaks or if a garage door breaks down. So that’s a disadvantage because a lot of the repairs inside and outside are my responsibility or the homeowner’s responsibility. Whereas in a condo, if something breaks anything outside, you just make a phone call to the HOA or the home association or the property management company that manages that complex that you are in, and they will fix it within a specific time. Many of the buyers that I’ve worked with or talked to, and based on statistics, many buyers buy condos or townhouses, which is an advantage of buying a condo or a townhouse, is that they are much cheaper than buying a house in general.
According to Redfin and realtor.com, the medium home price of a condo last year was around $368,000 nationwide, versus the medium home price of homes, single family homes was around $420,000. So as you can see, condos are generally cheaper than buying a house. And that’s one of the biggest factors. A lot of people buy a condo versus a house, which to some is an advantage.
The second advantage of owning a condo, especially if you’re a busy person. You work nine to five and you’re busy in the weekends or have kids or like to go out and ski or go play golf and don’t have time to stay at home, is that you have less maintenance cost. Not only do you save maintenance time wise, convenience wise, but any exterior things that go wrong, and usually most stuff goes wrong exterior wise because of the weather and the rain and the wind and etc. All those are covered by your association in your community. So that expense and inconvenience is not on you, it’s on the homeowners association.
A big advantage. If you end up buying a condo, then you’re probably the kind of person that likes the community atmosphere. There’s a lot of people there. As soon as you come out of your condo, you may meet a neighbor, or when you go parking or park the car, there’s other people there. You are in a high density area, chances are, so that you are close to the transportation, you are close to the restaurants, you are close to a shopping center. So depending on the location, and most condo locations are in the metro areas or high density areas, then you probably like that community where you’re not rural, where you have a house that’s way out there or from the freeway exit. It takes you 15 minutes just to get to your house. All the way to the house and you are more remote. So one of the advantages of buying a condo is that you have the community atmosphere, which you may or may not enjoy. As I mentioned earlier, condos are located in high density areas, metro areas. So the advantages are not only the community advantages, but the advantages are that you are near the shopping center, which I mentioned earlier. But you’re also closer to hospitals, schools, maybe more closer to the airports, more closer to train station or bus stations. You have a lot of taxis. So your accessibility to going everywhere is better with a condo complex versus a home where you are in remote areas or more remote areas than condo areas.
One of the biggest disadvantages of owning a condo or a townhomes is that you have your homeowners association fee and that is not fixed. Your mortgage payment may be fixed, but HOAs in general, in long term go up not significantly, but in general go up very slowly. So that’s a disadvantage. The other disadvantage is the more amenities you have. If you have a pool, if you have a jacuzzi, if you have a gym, if you have a clubhouse, if it’s gated or not gated, if it’s guard gated or not, guard gated all those chip into your homeowners association.
We know that more than 50% to 60% of all the people today have pets. So if you own a pet, there may be restrictions. When you buy a condo, they do allow pets, but a lot of the associations have restrictions on what kind of pets you can have. They have a size, 20 pounds, 50 pounds, 100 pounds, or they may have limit on what kind of pets you can have. Obviously most of them allow dogs and cats, but they also have restriction on how many you can have. And you may not be able to have other kind of pets if you wanted to.
Another minor disadvantage of owning a condo is that you do not have a lot of outdoor space. As I mentioned earlier, in a house you have your yard, you have side yards, you have a privacy or front yard, you have a lot of parking on the street. But in a condo there’s restrictions. You may just have a small patio or a small balcony. And even when you’re out there going out, there may be other people across the street looking at you. So there is not a lot of outdoor space. When you buy a condo, you are restricted on your space not only inside but also outside.
One of the biggest disadvantages of people who buy condos, and usually they don’t think about this when they buy because they’re not aware of it. So this is a good thing. You were looking at this video or watching this video, is that when you buy a condo and you’re very happy with it, there are some disadvantages. When it comes to resale. Condos are usually tougher to sell than homes. One of the reason is obviously because it’s not appreciating as much. So that’s a disadvantage. As I mentioned earlier, usually there are other disadvantages when you buy a condo. One is that of course it did not appreciate as much, although it does appreciate it. But the other reason is typically there are a lot of renters in the condo complex. A lot of people buy condos to rent it out for passive income. So the percentage of renters in your community is higher. So when you sell the home, the buyer may check and say, well, there’s a lot of renters in there. I don’t want a community where there are a lot of renters. Also, when you apply for a loan, especially for an FHA loan, if you’re a first time home buyer, this is a government loan, they do check to see what the percentage is of the renters staying in a community complex versus the owners staying there on their own. So usually it’s 50%. Don’t quote me on that. But the higher the percentage of renters staying in the community, the less chance of you getting a loan. So this is a big thing that a lot of people don’t consider or don’t know when they buy the condo. So that’s something you want to consider.
The other disadvantages when it comes to resale is in today’s world, if there is a couple working, if they have two adult kids, there is a lot of parking issues. Buying a house or a condo is a big decision. So hopefully, if you take the price of a condo or a house, if you take the location of the condo or a townhouse and the lifestyle that you want, you can make a decision based on any one of those that applies to you. Usually it’s the price.
These days, a location is a big deal because if you’re working in downtown and if you want to buy a house, you may have to buy 30, 40 miles away that you can afford. So location of where you can buy is also a big factor. But don’t forget the life style, because when you buy a house or a condo, you’re buying a lifestyle. And don’t give away your lifestyle because you go to work, you work hard, you come home, you want to enjoy the lifestyle. So I highly recommend that when you buy a condo or a house, base it not only on price and location, but also on lifestyle. Thanks.