2015 New Year’s Resolution: Buy a home. Condo or Single Family?

Condo v House
Stressing over New Year’s Resolutions?  2015 brings with it some big challenges of keeping fresh resolutions, like better eating habits, joining a gym or braving the mall to return holiday gifts.  But, some first time home buyers are also stressed with a big choice: should they pick a low maintenance condo or a single family home?

Let’s consider what a condo offers:

Advantages of Owning a Condo, Townhome or Duplex Home

Sharing is caring.
The first thing that first time home buyers notice about these types of homes are the close neighbors on a shared wall.  Either you will get to love your neighbors or you won’t, but be prepared to always have someone nearby.  Living with shared walls and close neighbors means cooperating with folks.  Just like an apartment or your mom’s basement, thin walls may exist in your new unit. Not a big fan of garlic?  Strong cooking spices may waft through the vents, and loud music or a set of drums can interrupt your quiet movie night.  Kids playing outside at 7am may not know you just worked the overnight shift and need to get some sleep.

Lower price point.
A lower asking price can make or break a deal for a first time buyer, so they can appreciate the lower price point of multi-units like a duplex or townhome. In many areas, a condo unit with two bedrooms and one and a half baths will be cheaper than a 3 bedroom, two bath single family home.   Condos often have less square footage, which costs less to heat and maintain.  Many first time buyers prefer to have a smaller unit in a dream neighborhood, insisting on a great location over square footage for their top priority.

Reduced maintenance commitments.
Having no grass to mow or flowers to clip can be a big plus for some new homeowners or a major negative for aspiring gardeners.  Dog owners may prefer opening a back door to a fenced in yard versus three daily walks.  However, many folks with long commutes or busy social lives may prefer the maintenance free condo, enjoying guilt free weekends without the worry of grass clippings and weed control.

Add in a monthly fee for the housing association (HOA).
This fee is part of the condo Home Owner’s Association (HOA) and covers the general maintenance like snow removal, garbage removal, lawn and landscaping as well as pool maintenance (if available).  This fee covers communal areas and is often higher at older buildings which require more maintenance every year than a newer building.  Again, these fees are due monthly, have a tendency to go up incrementally and are not tax deductible at the end of the year.

Restrictions may apply.
Keep in mind that major renovations are not permitted inside your walls, such as adding a skylight or removing a wall to open up a kitchen.  Weight limits and pet restrictions can also apply.  Carpet and paint are usually allowed at the owner’s discretion, but items like the type of window and front door are often on the “must be approved” list by the condominium homeowner’s association.  Also, most units cannot be rented out as an investment property.  Checking with the association rules before you purchase the unit will help alleviate this issue.

Dog owners need to check with the condo association on furry family members’ weight restrictions and breed limitations before making a purchase.
Is your condo - NO DOGS ALLOWED? -

As we’ve seen, owning a condo does have advantages and disadvantages.  Now let’s consider the single family home from a first time home buyer’s perspective.

Advantages of Owning a Single Family Home

Single family homes are typically more expensive.
In this instance, a buyer is paying extra for having no shared walls and is willing to pay more to get more privacy.
The listing price for single family homes is often higher than a multi-unit home.  This can force first time home buyers to rethink their neighborhood, commute time, square footage, or downsize the number of bedrooms.  Some decide to wait until their income increases, just so that they afford a larger mortgage on a single family style home.

Sharing and socializing are optional.
Since your walls are not shared, the property is yours in its entirety.  Often with a large backyard, a single family home can have amenities like vegetable gardens, pools, decks and plenty of grass to mow and snow to shovel in the winter.

No homeowners association fee.
Unless you’re in a community like South Elgin’s Thornwood, most single family homeowners will not pay a monthly association fee for landscaping, snow removal or pool maintenance.   Be sure to find out from the Realtor if the community lies within a structured Home Owner’s Association (HOA).  However, all the home maintenance on a single family home, including yardwork, landscaping and snow removal, is the sole responsibility of the individual homeowner.  They must handle their own upkeep, or hire a private service to trim the bushes, cut the grass or clear a path up the drive in a snow storm.  This is an added expense.  Winters in Elgin Fox Valley area can be hit or miss for icy cold, snow filled driveways, so be sure to keep that in mind when considering a single family home.

Greater responsibility offers more freedom for remodeling and landscaping.
Single family homes will have far fewer restrictions on what you pull out, demolish or put inside your home.  Permits  and local housing codes notwithstanding, homeowners have many more options for remodeling, such as adding rooms, knocking out walls or raising ceilings.  If you’ve always wanted to put in a waterfall and an in-ground pool, you’ll have a better shot at attaining such a goal with a single family home than in a courtyard of a townhome.

Property values increase faster for single family homes.
While both multi-units and single family homes hold their value over the long term and both provide the basic necessity of a having a roof over one’s head, single family homes still appreciate more rapidly than a condo, townhome or duplex unit.  Single family homes also offer a better return on investment than ownership of a condo, especially for tax purposes.  In many cases, the condo association dues and fees, plus restrictions, often outweigh the long term gains that a single family home can reach.

Not everyone needs a single family home as their first home purchase.  Time commitments, a person’s income, taxes, dues and amenities are all important factors to consider when thinking of making a move to a first home, no matter the size or style.

Let’s consider the good news for 2015, that first time buyers are no longer priced out of the housing market.  Also, with the new Fannie Mae mortgage down payment requirements being reduced to 3%, potential homeowners will find it easier to leave their old rentals behind.

If you know someone who is ready to stop paying their landlord, send them to ElginFoxValley.com to start a new home search today for free.  Or, contact me to get started on a home search in the Fox Valley area in Geneva, St. Charles and Elgin today!

Jennifer Kinzle is a licensed residential e-PRO broker with Charles Rutenberg Realty.  A published writer, she informs customers and clients about the local Elgin Fox Valley real estate market.  Got a great home buying story?  Please leave a comment below!  Thanks!
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