When it comes time to purchase your first home, do you really know what you are looking for? Is there a big difference in your investment if you go for the single family home or multifamily condo/ townhouse? The answer to this question is that it really just depends on location, market, and the specific property. There are a number of pros and cons for both single family homes and condos. Your finances and lifestyle are really the two most important factors to look at when considering your investment. We will take a look at the major differences between the two to give you an understanding of which type of property is best for you.
Whether you are a single person or a newly engaged/ married couple, purchasing a condo seems like a better idea than jumping right into a single family home. Depending on where you live, condos usually go on the market at a cheaper price than single family homes. Condos tend to be smaller than single family homes, and you usually do not get the privacy of having your own yard. It can sometimes feel like you are renting an apartment again if you have noisy neighbors above you. Parking spaces are usually limited, washer and dryers hookups are not always available, and a condo association usually has a say in if you can own a pet. These cons make it seem like investing in a condo might not be worth it, but rest assured you can always pick your preferences when working with a realtor. If you want a pet friendly facility, with a washer and dryer hook up, on the first floor, a realtor will accommodate those preferences as best he or she can.
Although you do have to pay an association fee when owning a condo, this amount is usually added in with your mortgage, and can actually benefit you. This fee goes toward upkeep on the property, which means you do not have to mow your lawn, or shovel in the winter. Most properties provide monthly pest control services throughout the building, which is payed for by fees, you pay monthly, into the condo association. Any outdoor maintenance or repairs that need to be fixed are completed by simply contacting the condo association. A majority of the time your condo association fees also include your monthly city services like water, sewage, and trash. In purchasing a condo you will have to pay a monthly fee, but this fee is simply to benefit you. What you are really paying for is convenience, which many people like.
In purchasing a condo you might have a smaller space of property, therefore end up paying less on property taxes than you would if you owned a single family home. Even though you pay into an association, you are still investing money into a property, therefore you have the rights to fix it up. New paint, new cabinets, and new doors you name it and you can create a living space that you love. Some projects might need consent from your condo association, but they are willing to work with you most of the time. In general, condominiums tend to appreciate in value over a short time, especially if you make upgrades to your unit. If you ever wish to sell your condo, you are almost sure to make money, rather than break even or lose money. These pros make investing in a condo a great first choice for new homebuyers.
Single Family Home
Single family homes are what many of us envision when we think of our future family and where we will live. They do have a lot of appeal, but there can be downsides to investing in a single family home right away. Unlike owning a condo, you have to set aside your own savings for emergency maintenance and repairs. If a pipe bursts, you are the one who has to fix it or hire and pay someone for their services in fixing the leak. Speaking of setting aside money, as an owner of a single family home, you are responsible for the upkeep of your property. This means if you have a huge yard, you have to mow the lawn and tend to any landscaping.What about a large driveway? This has to be shoveled or snow plowed if you live in an area where it snows frequently. Of course you can also pay someone to come out and do this for you, but you are still paying money out of pocket.
In owning a single family home, you do have to pay for your own homeowners insurance, and pay property taxes for the land you own. Although many cities give you installments for your property taxes, they can still be expensive and something you have to save for. You are responsible for all city bills, which is another added expense. Single family homes are not always larger than condos, but can be. With more space comes more gas to warm the house in the winter, more electronics needing to be plugged in, and more cold air needed to cool the house down in summer. This extra space can mean larger utility bill payments to make, adding to your overall monthly budget.
Purchasing a single family home does have a numerous amount of perks. First of all, you have your own space and privacy. Many single family homes come with your own backyard, which is a great place for a pool, garden, or entertainment deck. There might be an option for a two or even three car garage, where you can park your car, keeping it safe from weather damage. Just like a condo, owning a single family home means that you can complete any projects you want. If you want to tear down a wall, you just have to make sure it’s not going to damage part of your house, and you can go for it. No need to get anybody’s permission because you own the property. Single family homes will also appreciate in value over time, but many invest in a “forever home” meaning they plan to stay at that location for the next thirty years.
Yes, there are many differences between purchasing a condo and purchasing a single family home. It all comes down to your budget and preference when deciding which property is right for you. If you can’t decide between the two right away, talk to a realtor to get their professional opinion. That is what they are there for, and can aid in giving you the best investment options for purchasing your first home!