November 28, 2022

5 Reasons Condos Make a Great Choice for Your First Home

Reasons Condos Make a Great Choice

The thought of getting your own place is intimidating, especially if it is your first time buying a home. The first accommodation for one person does not have to be that massive. That is why most people rent an apartment when they move out of their parent’s house. But why waste money on rent when you can invest in your future?

A condo or condominium is a perfect hybrid of a house and an apartment. It is a great stepping stone to your dream home, as you can purchase and own it outright. So, an apartment is not the only option for your first house. You can consider buying a condominium for the following reasons:

1.     A Friendly Option for Your Pocket

Condos are smaller than single-family homes in space and floorplans. This difference in size makes them a more affordable option. But your first home shouldn’t necessarily have to be your eternal residence. The fact that you set your foot on the doorstep as a homeowner is what makes it valuable.

The monthly mortgage payment for a condo is also comparatively lesser than what you’d pay to rent a place of similar size. With rising mortgage payments and house rates, the relative affordability of a condominium makes it worth considering.

Above all, the mortgage payment you make towards your condo can help you improve your net worth in the form of home equity. Consequently, it becomes the fuel for a future purchase with more space or different amenities.

Reasons Condos Make a Great Choice

2.     Leverage Your Equity into the Next Purchase

Given that a condo is someone’s first residence, one would want to move to a bigger place in a few years. Leaping into homeownership in the form of a condo allows you to build home equity.

When you pay down the mortgage principal and your property appreciates in value, you build equity that you can use as a down payment on your next purchase. You might get more than the current square footage and additional amenities by paying a weighty down payment on your next property.

However, if you are sixty-two years or older, you maybe be able to borrow from your home’s equity without having to make monthly mortgage payments. Typically, on a reverse mortgage calculator, you will find a total of 40-60% of your home’s appraised value.

3.     Easy Homeownership With Hassle-free Maintenance 

Most young people avoid homeownership because maintaining a property is a hassle. A great thing about investing in a condominium is that the grounds around the place are typically the condo association’s job to maintain.

Monthly maintenance expenses embedded in homeowners’ dues or condo fees cover the staff they employ to support tenants. The condo association is responsible for trimming the grass, pruning the bushes, and caring for your roof, siding, fence, and parking lot.

So, condo owners do not always have to deal with the massive headaches of repair and maintenance in the building or issues that come from single-family homes. For the residents, this team is like having a property maintenance staff without the expense of employing an entire team.

4.     Apartment-Like Perks

A lot of people prefer apartments because of the amenities available within a complex, such as gyms, swimming pools, tennis courts, trails, and a community center. But some condo communities also offer similar benefits within steps of your property. So, one can enjoy an apartment-like lifestyle and the perks of house ownership as well.

Moreover, many condominiums fall in or near city centers, thus adding the benefit of close proximity to work and leisure. Besides, condos are a great option for people who like socializing because there is a sense of community among the residents as they tend to live very close to one another.

Ultimately, moving to a condo can be a lifestyle choice for many. But it can bring peace of mind that you are safe and secure because of the 24/7 security service. When guards are patrolling the area and a lobby to screen guests, outsiders can’t enter the building premises without approval.

5.     Return Rates and Upside Potential

For many real estate assets, cap rates and dividend yields determine the value, whereas the value of condominiums depends upon metrics and supply and demand. So, this is an opportunity for enhanced price appreciation.

Condominium investment is a strategy for smart individuals looking for a secure place to park wealth and as a hedge against inflation. In the past few years, it has become so popular that big institutions with billions to invest have adopted it to generate income and gain exposure to the red-hot housing market.

Even though condos are a great option when it comes to hassle-free investment, it can be hard to lock up deals when you are not physically in that city. Meeting brokers, attending open houses, and competitive bidding are necessary parts of the process and can seem challenging if you are investing from afar.

Amila Gamage Wickramarachchi

Amila Gamage Wickramarachchi is the founder of this blog where she shares her parenting and lifestyle experiences. She is an engineer and a trainer who works in the construction industry. She is the founder of Sihela Consultants.(www.sihelaconsultants.com)

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