Your Next Big Move: Condo or House? - Money Tip Tuesday

Figuring out where to live is a significant and costly decision everyone has to make at some point. If you want to purchase a property to make your home, condominiums, and houses are what you want to look at.

Each has pros and cons, and depending on your lifestyle, you may lean towards one over the other. Keep listening to learn which option is right for you.  

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Transcript:

Welcome to Money Tip Tuesday from the Making Money Personal podcast.     

The main difference between a condominium and a house is that when you buy a house, you purchase the land and the building on it. With a condominium, or condo for short, you buy the unit and share the land with other condo owners.   

Unlike apartments, you don't pay rent on houses and condos; you pay your mortgage and a condo HOA fee (more on that in a minute). However, some condos are available to rent if you prefer, but that means you won't build equity over time. When you buy a house or a condo and start paying your mortgage, you'll build up equity.   

One compelling reason to consider a condo over a house is the pricing. Condos are typically more affordable, making them an attractive option for first-time buyers. A study by the National Association of Realtors found that the median price of detached single-family homes was $42,000 more than the median price of condos, a significant difference that could make homeownership more accessible.  

However, condos usually have additional fees attached. Condos typically have a Homeowner Association, or HOA for short, which comes with fees. Some HOA fees include utility fees such as water, electricity, and more, which you would've had to pay anyway if you bought a house.   

An advantage of condos over houses is that upkeep is a lot easier. Due to the HOA fees mentioned, someone will handle all the exterior maintenance, like lawn mowing, snow removal, and general outdoor upkeep. With a house, you'd have to do everything yourself or hire someone else.   

While this has advantages, a condo may not be for you if you enjoy taking care of your lawn and garden and don't want to share it with your neighbors. Similarly, a condo is probably not the way to go if you value your space. With some condos, not only are you sharing your outdoor spaces, you might also be sharing walls. Many condos are attached so you will be very close to your neighbors. However, there are detached condos that aren't. Depending on your lifestyle, you might value this tight sense of community, or you might want your space away from others.   

A downside to condos is you have less autonomy over what you can and can't do with your space. Some HOAs have stringent rules, such as how you can decorate the outside of your unit and what pets are allowed. While some neighborhoods where you buy a house might have an HOA, you typically are not restricted with what you can and can't do to your home.   

Condos might also be harder to sell than houses, especially if the HOA is mismanaged. If you notice that many condos in the area are for sale, that might be a red flag that people are trying to leave this community.   

There are upsides to condos in that the insurance is generally cheaper than buying a single-family home. This is because you are only responsible for the inside of your home, comp