What is a condominium?

A condominium is a home attached to other homes, in which each homeowner owns ONLY their building, while the HOA owns and is responsible for the land, common areas, some exterior features of the buildings, and possibly the attached walls.  The exact ownership is specified in the condo’s CC&Rs and varies by condo complex.  Condos may include garages, carports, parking spaces, or no parking rights at all.

Homeowners are said to own “airspace” within the boundaries of their house.  They also share in the HOA ownership.  With a condo, some insurance may already be included for the building structure, so find out what’s included in the HOA before getting a quote from your insurance agent.

Condos often have smaller living space and less yard space than single family homes.  That can be either a positive or a negative, depending on your housing goals.  Condo owners love that they have very little yard space to maintain.  But for families with school-age children, they may prefer to have a bigger back yard.

Benefits and challenges of a condo

Benefits: Because of the common ownership, everyone contributes HOA fees, so prized amenities are available to all residents.  For example, homeowners may have access to swimming pools, rec rooms, basketball courts, and BBQ facilities.  Another benefit is that condos typically cost less than a free-standing home so they are perceived as more affordable.

Challenges: Common walls and small yards can reduce your privacy, and this can be a drawback.  Living in close communities means that nosy neighbors may annoy each other, and there could be more friction.  When the real estate market drops, condos are the usually the first to depreciate because they don’t maintain their value as well as detached homes.

Condos have HOAs, CC&Rs (conditions, covenants, and restrictions), and additional rules which the residents must follow; their terms can be very restrictive.  Another challenge with an HOA is that your neighbors are making and enforcing rules for the entire community.  That can be either good or bad, depending on the experience level, effort, and attitude of your neighbors.

Find out more property types in our book, "Buy Your First Home", http://tinyurl.com/dy2wjx4.