Top Pros and Cons of Buying a Condo
by Dixie Sommers – Freelance Writer and SHC Blog Contributor
Buying a home or condo can be very smart investment. Owning your own chunk of real estate can give you peace of mind and confidence through tough economic times. But there are pros and cons of owning a condo. Below are a few things to consider.
PRO: Real Estate Increases in Value
The biggest advantage of owning your own condo is that it’s a real estate investment. Put equity into your home and over time it will most likely increase in value. And if you’re living in that home then you have certain tax advantages as well.
PRO: Owning Your Home Reduces Living Expenses
The flipside of this coin is that owning your home also results in lower living expenses every month. If you are a low income household, and you own the condo that your family lives in, then having low monthly expenses is a real advantage. Some condo owners actually live below the poverty line and qualify for welfare benefits even though they own their condo. In these tough economic times that we are living in, this can keep your family from being homeless and living on the streets.
PRO: Easier than Maintaining a Single Family Home
When you own a condo, as opposed to owning a single-family home, it’s also a lot easier to maintain your property. Your homeowners association (HOA) hires a maintenance company to handle all the landscaping, waste management and upkeep of the common areas. This can save you a lot of time and money in the long run, since single-family homeowners often defer maintenance and repairs to save money. This usually results in small, inexpensive problems turning into large, expensive problems.
CON: Increased Liability and Risk
When you own your home, you become liable for damages or injuries to third parties that occur on your property. If you are not adequately insured, a single incident can possibly lead you into financial ruin. But when you rent your home, your risk of liability is substantially reduce. You’ll still need to purchase renters insurance, but this is a lot cheaper than purchasing homeowners insurance. So in the long run, you possibly end up saving a lot of money this way.
CON: Less Capital Available for High-Return Investments
The biggest argument against home ownership or condo ownership is that making a big purchase like this ties up your capital and causes you to lose out on other investment opportunities. While both the stock market and the real estate market experience upward and downward swings from year to year, you usually have much greater opportunities for returns by investing in the stock market. While there are no guarantees, people who invest in the stock market often yield higher returns than those who invest that same amount of money into a home purchase.
There is no single investment strategy that is perfect for everyone, but there are different strategies that will work best for you. If you still have questions then you should contact qualified financial planners or real estate agent services to discuss what options might work well for you and your family.
Article submitted by
Dixie Sommers, Freelance Writer, [email protected]