If you’re looking for lower-maintenance living that can be budget friendly, a condominium (or condo) could be the right choice for you. Before you buy, it’s important to know what you can expect and how the buying process for a condo differs from that of a detached home.
Each condo unit is typically owned by an individual homeowner, with the shared facilities owned by all the condo owners collectively. Condo communities are governed by condo owners associations that arrange property maintenance and management. Apartment units are rented, and apartment buildings have single owners, which may be large companies or smaller entities. Apartment maintenance is usually overseen by a property manager. Condo owners make mortgage payments to a servicer, increasing the equity they have in the home. Renters make monthly payments to their landlord that allow them to live in the property but do not confer any equity or ownership.
How is it different than a single-family home?Unlike owning a single-family home, you jointly own the exterior property and common areas along with all the other owners in the community or building. Along with the other owners, you will also pay a monthly “condo fee” or "homeowners association fee" that covers general repairs and maintenance to the building’s exteriors and common areas, usually including water, sewer, and trash services and amenities’ upkeep. This payment also contributes to a cash reserve fund for future needs.