There are many benefits to homeownership. Buying condos affords the
owner all the tax and investment benefits of a home while allowing all
the access of amenities and convenience of apartment living.
The term condominium or condos is used colloquially and sometimes
synonymously with then word apartment, but a difference is denoted in
the actual meaning of the two. A condo refers to an apartment in a
complex that is owned rather than rented. It is also a misconception
that these homes are bigger and more luxurious. They, in fact, can range
from studio size apartment to pent houses. Ownership really is the only
thing meant to be implied by the term. This usually brings up two
questions by inquirers. Why buy condos rather than rent a similar unit?
And, “Why invest in this type of real estate as opposed to a single
family home?”
The benefit of homeownership as opposed to renting is quite clear.
Buying is an investment. Owners are paying a monthly payment in exchange
for equity. As the mortgage is paid, an owner sees his assets raise and
his liabilities decrease. Renting is throwing money toward housing
without any financial benefit. Sure a mortgage payment will initially
seem steeper than rent on a similar unit, but many factors should be
considered. Ownership has tangible tax benefits. The deduction gained by
ownership will outweigh the difference between the cost of owning and
renting. Rent is likely to be raised annually by complex owners as their
overhead costs rise. A mortgage payment will remain the same throughout
the life of the loan. Also consider that a payment on an owned unit
includes what banks call PITI (principle, interest, taxes, and
insurance); a renter must consider renters insurance on top of the
monthly rent.
Living in condos has some immense benefits over traditional home owning.
These homes are a part of a complex that houses many units, and the
inhabitants share ownership of mutual properties. With the cost of
monthly mortgage (and possibly an HOA fee), the amenities of a pool, a
clubhouse, a fitness center, a walking trail, a tennis court, etc. are
part of the deal. The conveniences and simplicities of apartment living
are enjoyed with the benefits of ownership. The owner of the building
takes care of outdoor maintenance such as the lawn, the gutters,
painting, wear and tear, and some buildings will also include the
availability of maintenance indoors. Imagine owning a home, but being
able to call someone else to change fix the dishwasher, unclog the
toilet, or adjust the hot water heater.
In comparing the two options, weigh the benefits of your individual
situation. If your job is a transient one, such as the military, the
economy at the time of purchase/rental may weigh heavily on your
decision. Renting may be smarter in a poor housing market, but be sure
and include all the benefits of owning in the equation. Tax benefits,
built equity, and the value of time will usually tip the scales toward
home ownership.
