Buying a single-family home probably comes first when considering investing in real estate. And for a good reason – homeownership has been traditionally seen as the cornerstone of the American dream. But as the housing market has shifted in recent years, more and more people are reconsidering whether buying a house is the best investment for them. For many, the answer is no. They’re choosing to invest in condominiums instead. Here’s a look at the condo vs house comparison.
1. More Affordable than Single-Family Homes
One of the biggest reasons people decide to invest in condominiums is that they’re more affordable than single-family homes. It is usually less expensive because condo units are much smaller in square footage.
When you live in a condo complex, exterior maintenance is often already taken care of. Duties like landscape work, painting, and roof repairs are usually handled by the condo board or homeowners association (HOA). So you can relax and enjoy your free time instead of worrying about fixing things around your home.
One important consideration in the condo vs house decision is condominium is HOA fees. The more amenities and services the condo complex offers, the higher the HOA fees. If you don’t care about certain amenities, like a swimming pool or gym, tell your real estate agent. Then they’ll know what to look for when searching for condominium complexes on your behalf.
2. Low Maintenance Costs
When you own a condominium, you also own a share of the common areas like the lobby, hallways, swimming pool, etc. That means you’re not solely responsible for their upkeep and maintenance. This can be a significant cost-savings compared to maintaining a single-family home alone.
Condominiums often have lower maintenance costs than single-family homes because these expenses are covered by the homeowner’s association (HOA). The HOA dues for condominium owners typically cover quarterly, meaning homeowners will not have to worry about expensive surprises.
Just remember that low maintenance does mean no maintenance. As a condo owner, you will still be responsible for maintaining the interior of your unit. This includes tasks like painting, appliance repairs, and carpet cleaning. You still need to set aside time and money for regular upkeep.
3. Rental Opportunities
Condos can also be rented out-providing you with an extra stream of income if you so choose. Many real estate investors want to generate passive income, and own/operate rental properties. With the rise of short-term rentals (e.g., Airbnbs), more travelers are interested in renting condos over staying in hotels while on vacation. The smaller size of a condo generally has no bearing on how much money you make as an owner. Plus, attractive locations tend to have lower condo prices than single-family residences.
Finding renters would not be difficult, especially if the condo is situated near popular tourist destinations or in the central business district of a city. If you live in the condo unit, you would also have the opportunity to meet new people and make friends with your renters. If it also has amenities and facilities, potential renters would be more interested in living there as it is more convenient for them.
4. Appreciation Potential
Investing in a condo also has the potential to appreciate over time. While no one can predict the housing market’s future with 100% accuracy, condos tend to appreciate more quickly than single-family homes. This is because condo complexes are often built in desirable locations close to “up-and-coming” neighborhoods or popular attractions. As the surrounding area becomes more desirable, the value of your condo complex will likely increase as well.
Of course, there are risks associated with any type of real estate investment. Condo complexes are not immune to these risks. For example, if a new condo complex is built nearby and offers more amenities for a lower price, your condo’s value could depreciate. Or, if the surrounding area becomes less desirable (e.g., crime rates increase), your condo’s value could also drop.
The idea that condominiums will appreciate over the years is one of the main reasons people invest in them. In the Philippines, condominiums are a great opportunity for Overseas Filipino Workers (OFWs) to invest in their financial future. These properties provide a steady stream of passive income and have the potential to appreciate over time, making them a good investment choice.
More corporations are starting more projects in the South of the Philippines, and one place that is getting a lot of attention is Davao City because of the low cost of doing business. Thus, a condo unit for sale in Davao City looks appealing to many investors and OFWs seeking to generate more income.
5. A Sense of Community
Another often overlooked benefit of living in a condo is the sense of community it fosters. When you live near your neighbors, it’s natural to develop relationships with them. This is often more difficult when living in isolated single-family residences.
Condo owners often form close-knit relationships with their neighbors and develop a strong sense of community. This can be beneficial if you ever need help taking care of your unit (e.g., when you’re out of town) or simply want someone to chat with on your balcony.
Condo living also provides opportunities to socialize and meet new people. If your condo complex has amenities like a swimming pool, fitness center, or clubhouse, you’ll likely have the opportunity to meet other condo owners who share your interests. You can also get involved in your condo association and take on a leadership role if you’re interested in doing so.
In a Nutshell
If you’re considering investing in real estate, don’t rule out condominiums – they may just be your smartest investment choice! When you own a condo, you’ll enjoy several benefits, including the potential for rental income, appreciation, and a stronger sense of community. Just be sure to research before purchasing a condo unit to understand what you’re getting yourself into.
