Condo or home re: annual costs?

[accountingsucks]

As part of my plan for an early retirement I have been thinking of moving from my paid off 2 storey three bedroom home to a 2 bedroom condo. Have others lived in both a condo and a home? I am mainly interested in the annual costs over a long period of time. At first glance it would appear that condos have higher costs due to their high-ish condo fees (where I live they are typically over $500 a month for a concrete highrise), however many of those include water, heat and utilities so it's important to compare apples to apples. Also of course they include exterior maintenance. As everyone with a home knows, some years it can be painful to be a homeowner. Also one thing I've noticed is that the more amenities in a condo, obviously the fee is higher. Those condos with a pool seem to be the worst offenders and I don't think I'd every get a condo with a pool for that reason.

 

[Brat]

We have had homes from the early 70s and recently sold and moved to a older co-op. Many of our friends purchased condos.

As in single family dwellings, condition and reserves have a huge impact on your costs. Pay attention to the condo's materials and construction. What I call fake stucco (to avoid pointing a finger at the guilty) is a maintenance nightmare. Avoid it like the plague. Pay attention to seemingly little things, like the balance on the ventilation system, if it sucks too much it will pull moisture in through the walls. Flashing of windows and decks is another source of grief. Don't buy off on the claim of some Realtor's that your inspection shouldn't include the building itself because that is where your real financial risks are. Ask to review their last reserve study.

Our costs are lower in our co-op but then it is a completely different lifestyle. In a down housing market condos take a higher % hit, lending standards are tighter.

I agree that a swimming pool is a money pit. Unless that is the standard in your community avoid them.

FYI my husband is an architect whose expertise was project management, construct-ability and value engineering.

 

[chinaco]

We own a home that is bigger than we need. We will downsize.

At this stage of life, I would not buy a condo. We will replace our current home with a ranch...

However, I have considered selling our home and renting a condo for a few years while we do some extended traveling. If we do that, we would wait to buy the replacement home.

 

[Trawler]

We have lived in both a condo with no pool for 8 years and currently single family home for 14 years. After tracking expenses over the past 6 years years on the home and looking to go back to condo in our case the cost is about the same however we updated the interior and new roof of the home . Some things to consider on the condo or a home. Is the condo interior updated or does it require a makeover. How well is the exterior kept up ie when was the last paint job , roof replacement. Are the driveways in good shape or need resurfacing? Is the condo managed by the homeowners association or contracted out to a management company? Management companies add about 15% in costs. What is the financial condition of the condo association? Do they have a good capital reserve plan to cover the major replacement and maint. items as they come due or will they need to do a special assessment? Where we live Columbus Ohio it seems a well run home owners association and well kept condo of similar value to our house are about the same. One thing I have found is that the condo market here tends to get a higher sales price per square foot than SF homes of similar value. Hope that helps.

 

[easysurfer]

I think overall the expenses pretty much even out. I look it more of as convenience than expense. I live in a condo and sometimes it gets me when they raise the annual maintenance fee for something I really don't care much for --but that's part of what I signed up for. On the other hand, it sure is nice, like in this recent snowstorm to not have to worry a bit about shoveling snow as that's all prepaid for in the maintenance fee.

 

[Aiming_4_55]

I've lived in both. Condo for the first 8 years after undergrad studies, then single family home for over 10 years.

I feel both offer benefits and would consider a condo again as I get closer to FIRE. The condo offer many benefits to fit my future lifestyle, i.e. less personal maintenance, less concern when traveling, more fixed budget, etc. If you calculate all the tasks cover under the condo fee to home fees, it'll probably be a wash, however you'll have saved yourself some time.

Some good advice to review condo reserves, financials/budgets, special assessment history, by-laws (some prohibit rentals), condo board, general condition, pool, etc.

 

[kcowan]

Make sure to review the condo rules and try to determine how they have evolved. Can you rent out your unit? Can you have any sized pet? Are BBQs allowed? etc.

 

[RunningBum]

Make sure the condo complex doesn't have a lot of units in foreclosure. That would likely mean the dues aren't being paid, and you'll either go without a lot of maintenance, or dues will rise for those who are paying.

 

[Gone4Good]

Costs should be identical for identical properties. There is nothing that makes condos more expensive to own than any other real estate. However, cost differences can easily relate to differences in locations. A condo in the city is going to be more expensive per square foot than a house in the burbs.

A greater consideration, IMHO, is how much you [-]can tolerate[/-] enjoy people living directly above and below you.

 

[RunningBum]

Costs should be identical for identical properties.

There's no way a house is going to be identical to a condo.

There is nothing that makes condos more expensive to own than any other real estate.

Management fees and loss of control over when and what to spend on maintenance, landscaping, etc are two things. Professional landscaping vs. doing it myself is another.

However, cost differences can easily relate to differences in locations. A condo in the city is going to be more expensive per square foot than a house in the burbs.

True, but this would be one of those non-identical things.

A greater consideration, IMHO, is how much you [-]can tolerate[/-] enjoy people living directly above and below you.

True