Buying a Condo? Pros and Cons for You to Consider

Buying a condo can be a great choice for solo buyers, small families, those not interested in maintaining and cleaning a large property, those with smaller budgets, and people who prize other amenities over large outdoor spaces. There are many other factors to consider when deciding between buying a house or condo, so read on to discover whether this type of property is a good fit for you.

What is a Condo?

Condos are residential buildings in multi-unit properties where individual tenants own the interior of their unit but share ownership of exterior and common areas such as landscaping, roofs, hallways, community rooms, pools, parking areas, and gyms. They're a relatively new concept, having only been around since the 1960s, and are one of the easiest properties to own and maintain.

When considering "Should I buy a condo?" be aware that a condominium isn't just an apartment you own. Unlike renting an apartment, condo owners are responsible for maintaining everything inside their unit — from the carpet to the interior plumbing. When it comes to the building's exterior and common areas, a Home Owners Association (HOA) is in charge of making repairs or updates. However, condo owners must pay monthly dues to a condo board or HOA fees, which can range from a couple of hundred dollars to $1,000.

While you may find a condominium as part of a towering high rise, buying a condo that is a detached structure within a complex isn't unheard of. This setup means that, for good or bad, condo owners are part of a community of other owners. As you can see, condos share similarities with apartments, but there are some differences. But how does a condominium compare to other types of residences?

Condos vs. Townhomes

The main difference between condos and townhomes is that townhouse residents own much more of the property than condo owners. Owning a townhouse means that you own its interior, exterior, and any standard features (instead of those being maintained by an HOA or condo board).

Townhomes also offer a bit more privacy than condos. They can be more spacious and can include a front and back yard. Instead of sharing walls, ceilings, and floors with other residents, like with condos, you may only share a wall or two and might not have to worry about neighbors above and below your unit. However, the extra space and privacy comes at the cost of higher property taxes, which are the sole responsibility of the townhome owner. You'll likely also pay more for homeowners insurance on a townhome than a condo.

Condos vs. Houses

While one of the main differences between buying a house or condo may seem like space, what if you're comparing a cottage and a condo? When considering a smaller home vs. a condominium, the main difference is similar to a condo vs. a townhouse: property ownership. You'll own more property with a house, including the land, which means you'll have more privacy. However, that also sometimes means higher property taxes and more costly homeowners insurance.

The Pros and Cons of Buying a Condo

Before deciding on the right property, you need to seriously consider the question, "Is buying a condo worth it for my situation?" To help answer that question, here are the pros and cons of buying a condo vs. a house.

The Pros:

Cost

Condos are usually more affordable than single-family homes, especially in some areas of the United States. They can be a good option for a buyer who isn't ready or willing to buy a home but wants more privacy than apartments afford.

According to the National Association of REALTORS (NAR), the median sales price of a condo in the U.S. in 2024 is $339,400 compared to $384,500 for a single-family home. Condo owners build equity just as they would with a single-family home, and values have stayed strong or grown since the pandemic, according to data from the same period.

When you pay down your mortgage, you build equity that you could use to help purchase another property later. The mortgage interest can be deducted from taxes, just like with a single-family home.

Little-to-No Maintenance

Forget spending your weekend morning mowing the lawn or cleaning the gutters. With condos, the shared management group, the HOA, takes care of that for you.

However, you pay for upkeep with your HOA dues, which fund complex-wide maintenance, including new roofs, pool care, landscaping, and general upkeep on the overall property. Covered maintenance can be well worth the dues, especially in cases like buying a beach condo, where the salt air can require more frequent repairs.

Amenities

Condo complexes often offer amenities such as gyms, pools and spas, community rooms, and maintained common outdoor areas to socialize or enjoy picnics or barbecues. Because you don't usually get a yard with a condo, it may be important for you to have amenities and features to make up for that. These amenities can also foster a sense of community with your fellow condo owners that you might not get with a single-family home purchase.

Independence

Compared with apartments, buying a condo affords more independence because owners can change whatever they want inside the unit while decorating or remodeling. The HOA likely would regulate some larger projects, but owners don't need to worry about putting nail holes in the walls or painting the interior an unusual color.

Security

Some condo complexes have enhanced security features like fencing, gates accessible only by electronic key cards, or security staff patrolling the premises. Similarly, many condo buildings can only be accessed by keycard and have security guards monitoring their lobbies.

The Cons:

Those HOA Dues

That leaky roof isn't going to fix itself, and being financially responsible for repairs is a big factor when people wonder, “Should I buy a condo?” Condo owners pay monthly fees to their board of elected members, who live in the complex and decide how the complex is managed and when major repairs are made.

Occasionally, the board will institute increased fees or dues to fund a large-scale project. These new costs may be large and are sometimes unexpected for owners. This is another difference between a condo and a townhouse or single-family homeownership.

Management Styles

Associations can also enact restrictions on visitors, parking, renting out your unit, the number or type of pets allowed, exterior decorations, and more. This can be a big factor when debating between buying a house or a condo.

The association is responsible for planning and funding long-term maintenance projects, so owners should be aware of the building's condition and age and how these common expenses are managed. It's also a good idea to talk to a few owners in the complex about their experiences before you commit.

Less Privacy

Buying a condo has sometimes been compared to buying an apartment, and that's not entirely inaccurate. You may own your unit but share walls, floors, a roof, and common areas with other residents. You may enjoy the sense of community, but you may also hear more than you want from your neighbors in a condo vs. a single-family home. Some condo owners also rent out their units as short-term rentals, and you won't have a say in who stays next door. Be aware of the rules governing that and consider whether having temporary neighbors is acceptable to you.

Buying and Selling a Condo May Be More Difficult

Condo mortgage document requirements can be more stringent, and units may not qualify for all lending programs, such as VA or FHA loans. They may also come with higher interest rates or greater down payment requirements for a number of reasons, including whether the association's finances are stable.

If you are selling a condo, you may also be competing with other similar units in your complex.

Home Warranty Coverage for Condos

If you've decided that buying a condo is right for you, consider including a First American home warranty. Coverage can help protect your budget from expensive, unexpected repair or replacement bills for your appliances. It can also cover your condo's plumbing, electrical, and heating and cooling systems. Find out more about our real estate warranty plans and the convenience and peace of mind they provide with a personalized home-buyers' quote.

If you already own your condo, learn about our home warranty coverage for condos or get a quick quote.

FAQs for Condo Buying

Is buying a condo a good investment?

According to NAR data, condos have appreciated in value in ways similar to that of a single-family home since 2020. They also grew in demand as homebuyers reassessed how and where they wanted to live during the beginning of the COVID-19 pandemic.

NAR data also indicates that condo sales amount to about 10 percent of overall sales. While the answer to "Is buying a condo worth it?" isn't a "yes" for everyone, condos can be a good fit for the right lifestyle.

Is hiring an agent a good idea?

As you consider the reasons for and against buying a condo, experts advise finding a real estate agent who understands the landscape of condos in your area and, ideally, has experience buying or selling them. An experienced agent will help answer questions you may have about HOAs and be able to assist you in reviewing the association's governing documents to see if you are a good fit for the community. It can be an even better choice if you're figuring out how to buy a condo for the first time.

How do I buy a condo?

If you're asking yourself, "How does buying a condo work compared to buying a house?" they're basically the same process. You can hire a real estate professional, you'll need to secure a mortgage loan, have an inspection completed, pay closing costs, and follow similar house-hunting tips. For more information on the real estate process for houses and condos, read our guide, 10 Steps for New Home Buyers.

The contents of this article are provided for general guidance only. First American Home Warranty does not assume any responsibility for losses or damages as a result of using this information.