When I got married our first home was a condo. It was a top-floor unit in a building of 10, including 6 garages (we didn’t have one), purchased for $60K with a first time buyer program from the state. Condo association fee was about $100. We had two other assessment for around $600-700 each, one for exterior painting and another for a new roof. The first happened within a few months of ownership, it was quite a shock. It was only about 1000 sq ft, but was quite suffiecient for two people. We sold 2 1/2 years later for $67K, which allowed us enough cash to have a down payment on our current house from which I hope to never move.
Condos can be a good thing is my point. We bought in a good area and were a little lucky, which always helps.
Thanks for all the responses, guys and gals. Lots of good things to keep in mind, but overall I’m optimistic that this could work out well, especially with appreciation being what it has of late. I suppose the market could completely tank next year, but the worst case scenario is that I keep the condo a little longer, and but away some extra money for a down payment on a house, when the time comes. Wish me luck!
Jeff
Really, I have a friend in my city who told me his condo is a 100 year lease…
Found this for California:
" One important thing to remember about a condominium is that you don’t actually own
the unit you live in nor the lot.
You own the air space inside the walls, ceiling and floor of the unit.
With a townhouse you own the unit along with the lot.
Owning a condo, you are restricted from adding a room, painting the exterior or
changing the landscaping." http://www.south-county.org/ScottMitchener/Condominiums.html
Pretty good site. The guy’s a realtor, and certainly more knowledgable of real estate in South County.
In any event, I don’t doubt at all that you’re friend has a 100 year lease on a condo. There are probably tens of thousands of such leases out there. But there is are at least some that are sold, and you do own the unit in perpetuity, along with the dirt underneath it, subject of course to the various restrictions of the local condo association. There are also plenty (probably a majority) where you own the “airspace” in fee simple. Here in Oklahoma, condos are primarily of the “townhome” plan, which makes it possible to own the dirt underneath because there’s no one above you. County atlases, for these types of condos, actually show long, narrow lots, with the owner of record of that strip of dirt being the owner of the unit.
The short of it is, it’s really a moot point anyway. A condo buyer (hopefully) knows going into it that he/she doesn’t have the right to do anything they want with the unit, such as repaint the exterior, at least without the condo association’s okay. But you doown something of value (unless you’re leasing it) that can appreciate in value and later be resold at a profit. Sure, for reasons outside of your control, the condo could lose value, but that’s true of any piece of real estate in the world.
If one wants to buy a condo, learn your rights in your community, do the research on the property you’re interested in. There’s absolutely nothing inherently wrong with them that should cause you to shy away from them, I work in real estate and many of my co-workers are condo owners.
If it’s a lease, why is it called a condo? A condo is ownership. A lease is rental.
That cite contains certain technical errors. If you read the Declaration establishing the Condominium Development, you will see that the unit is described as the air space between the walls, ceiling, and floor. In addition, you do have a part ownership in those structures, which are part of the “Common Elements.” That ownership is an undivided interest consisting of a fraction, the denominator of which is the number of units in the development and the numerator of which is the number of units you own. And, those structures, moreoever, are part of the “Limited Common Elements,” which means the use and enjoyment thereof is limited to the owner of the unit.
There are far more fundamental differences between a condominium and a townhouse. Sure you can make alterations in your townhouse that you cannot (without permission from the Board) in a condo, but you are also responsible for the maintenance and repair of the outside portion of the unit: the walls, sidings, rooves, etc. In a condo, the Board is responsible to see that all that work is done and that the outside is being maintained in good order. People who buy condos usually buy them for that reason, along with the Board maintaining the landscaping (which is part of the “General Common Elements.”)