House VS Condo

House VS Condo

With home prices rising all around the Austin area, it makes sense to consider all of your ownership options. Condos are a viable option, and Austin is building them fast. 

Let's look at the difference between owning a house*** and owning a condominium and why you might consider leaning one way or the other:

The main difference between houses and condominiums is in the form of ownership itself. 

When you own a house, you own the land under it and the entire structure. You are entirely responsible for its upkeep. When you own a condo, you own the interior of your unit, but the exterior, the communal areas, and the lawns belong to the HOA, of which you are a dues-paying member. 

The monthly dues can earn you a lot of perks. Condos are great for staying in the action - many of them are located in walkable parts of Austin, with fun things to do and great places to eat nearby. Frequently, they offer amenities like gyms and pools. There's no yard to maintain, but there are usually some pleasant communal spaces. Even home insurance can cost a bit less, since you are not insuring the exterior structure.

Beyond choosing a location that might feel like a desirable part of your city - can't go wrong with South Congress here in Austin, right? - you also need to consider the health of the Condo/Homeowners' Association. You and your Realtor (and if you're looking for homes in the Austin area, I hope your Realtor and I are the same person) will count on the help of Google, the self-reporting from the HOA, and a reliable title company to discover any issues, such as lawsuits against the HOA, reports of mishandled funds, etc. 

If you read no other document during your home purchase (of course you should read all the documents), read the Homeowners' Association documents. Each HOA is unique and is allowed to create any number of unusual rules. Take a very boring couple of hours to really read them - you'll discover vital information. For instance, most HOA's will raise your monthly fees if they assess their reserves and find them to be lacking. You don't want to be taken off-guard by such surprises.

Occasionally, lenders are slightly less eager to fund condo purchases. Single family units (houses) are generally considered a more stable investment - depending on many factors, of course. Houses tend to appreciate more readily and to have fewer restrictions of ownership. In many condos, there are limits to how many units may be rented, so you may find yourself wanting to move to the ocean in two years, but still on the waiting list to be permitted to lease your condo out. 

Also, be aware that there are a couple of more hoops lenders will require you to jump through for condo sales than they do for sales of houses. To be granted a loan for a condo, the HOA will need to answer the "Condo Questionnaire," which is answered by the association and helps the lender decide whether to give a buyer a loan. It will tell them things like the percentage of renters to owners living in the condos, whether one person owns a lot of units (risky because of the concentration of responsibility), and how much money the association keeps in reserves. 

Whether you decide to buy a condo or a house, I'd love to get you started on your search. Contact me today and let's find your home!

*** For the purposes of this post, I'll focus on homeownership outside of HOA's (Homeowners' Associations), since HOA's vary from lax to extreme and can replicate some rules of condominium ownership. 

Kate Ward

Team Price Real Estate


Kristina Ainsworth Headshot
Phone: 512-925-7368
Dated: September 26th 2017
Views: 35
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