Condos are popular in select locales because they offer the best of both worlds. A condo can be a home of your own in a desirable location without the worry and hassle of upkeep and maintenance. At ADKPP, our clients are often familiar with these benefits, but may not have looked too deeply into the downside of owning a condo.
Before committing to a condo purchase, be sure to explore common challenges or sticking points faced by condo owners. Our ADKPP real estate experts share their take below on 9 potential condo drawbacks. By considering all aspects of condo life before you start pursuing a purchase, you can make a more confident decision about whether a condo is the right investment for you.
What is the downside of owning a condo?
1. HOA Fees
Along with mortgage and property taxes, condominium owners pay homeowner association fees (HOA fees). These are monthly dues that go towards community amenities, building maintenance, cleaning services for common areas, upkeep of laundry facilities, and more. Typically, HOA fees can vary from $100 to more than $1,000, and can increase over time.
There are a few reasons why HOA fees can rise, including major building repairs or a special assessment made in each occupied unit. Most associations will take a portion of your monthly payment to put in a reserve fund, a savings account that can be used for future expenses or projects. You should always check to see if there is a reserve fund before buying, and ask how much is in it.
2. No Outdoor Space
While having no yard work is a big advantage of condo ownership, not having green space can be a downside of owning a condo for some residents. Especially if you have kids who want to play outside or a large dog, walking a distance may be required to access a playground or park. However, some condos have courtyards or rooftop terraces to provide outdoor space for residents.
3. Lack of Privacy
Similar to an apartment, condos share walls. You might hear your neighbors walking across their condo or having a party. You might hear loud TVs or animals. And, yes, they might hear you, too. For people used to living in apartments, this may not be an issue. However, if you’re downsizing from a house to a condo and want to retain peace and quiet, condo living may not be ideal.
4. Pet Restrictions
Though most condos do accept pets, there can be limits on size, breed, and number of pets. This can be a major downside of owning a condo for pet lovers. Some condominiums will also require you to pay a deposit for your pet, which is something to keep in mind when budgeting. Additionally, if too many complaints are lodged about your pet from other residents, you may have to get rid of your pet or move. Make sure to read the rules on pets before you move in!
5. Limited Parking
Parking can be an issue. You may only have one reserved parking spot for your unit, making it difficult to find a place for a second vehicle, guest vehicles, or a recreational vehicle like a boat or RV. Some condos allow for 2 parking spaces or visitor parking. Check the policy.
6. Specific Rules to Follow
There are sets of rules condo owners have to abide by. Called the Declaration of Covenants, Conditions, & Restrictions (CC&R), these rules are enforced by the HOA. Some examples of these rules are: not being able to put solar panels on your roof, parking rules like no overnight parking on the street, quiet hours being enforced, bans on smoking or drinking in community areas, and more. If these rules sound too restrictive, CC&R’s night be a big downside of owning a condo for you.
7. Value Appreciates Slower Than Houses
When you buy a condo, you’re only investing in the living space, not the land. This means the value appreciates more slowly over time. Over a longer stretch of time, houses have historically demonstrated higher appreciation rates because more people prefer home ownership, but there’s evidence to show condos may be closing the appreciation gap. In Lake Placid, because only condos and townhomes can have unlimited short term rentals, the price has been escalating more than usual.
8. Lack of Storage Space
Not having a basement, garage, attic, or extra closets might be a downside of owning a condo for residents who need to store items. Some condos include small storage units assigned to each condo, but this isn’t guaranteed. Downsizing possessions or moving may be necessary to get more space. Renting a storage unit can be a viable solution and is likely a cheaper option than moving to a larger condo.
9. Short Term Rentals
If your condo is located in a resort town or vacation area, you may have neighbors who rent to vacationers. This means you never know who will be staying next door at any given time, which can prove to be an issue. In the worst case scenario, rowdy neighbors can be a serious downside of owning a condo. Ask before you buy to find out who the full time residents are, versus who rents when they are not there. The upside is that you can rent your condo, and many owners make enough to cover their real estate taxes and more.
If any of these drawbacks are a major downside of owning a condo for you, carefully weigh the pro’s and con’s before you decide to buy. If these things don’t deter you and you want to move full steam ahead into condo ownership, be sure to work with an experienced local realtor. To explore condo listings in Lake Placid, New York and surrounding areas, contact a Berkshire Hathaway HomeServices Adirondack Premier Properties forever agent to get started. Call 518-523-3333 today!