Last Updated on February 23, 2020 by Ecorf
Ready to buy a home, but looking for something with a little lower maintenance and possibly lower cost? If so, then I’d advise you try looking for a condo! Condos make for a great full-time living option or an awesome choice for a vacation getaway.
Not only are they generally very low in maintenance and a little lower in cost, while using it, you won’t need to be paying any taxes on your surrounding property. So how much does a condo actually cost? Unfortunately, even though there isn’t a simple and direct answer to this, below are a few considerations you should make when opting to buy a condo.
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The One-Third Rule
The common financial advice for living within your means is to spend your net monthly salary within the following limits: One-third on home expenses (i.e. rent or mortgage and taxes), one third should go to savings, and one-third should go to other monthly expenses (i.e. food, gym membership, shopping).
So after this evaluation, if you still think you are ready to buy a condo, make sure you look into condos within your price range. You can achieve this by visiting Zillow, who has a great affordability calculator that will make it simple for you to not only find your range, but where you should be searching. (Another quick tip: try and make sure you have a 20% down payment available, in order to avoid purchasing mortgage insurance by most banks, and also be at a greater risk of losing your house if the market takes a turn).
Condos often have very enticing perks like pools, security, common areas, and scheduled property maintenance that make them a great option for the busy working individual or vacation-goers who want an oasis to call their own. However, these services and property perks come at an additional cost in most communities, which is why you need to find out the condo fees, and their value when you are looking at purchasing and adding it into the monthly cost along with your mortgage and taxes!
Renting and Subletting
Luckily, many condo communities will allow you to rent your space out in order to cover some of the costs, which will invariably bring down the condo’s annual cost. Also, make sure that before buying a condo, you check with the property manager before acquiring it, as certain communities will not allow you to sublet your property for any amount of time, or have limitations on who you can rent to and for how long. Another financial consideration to look into when considering renting is additional insurance. You may need to add liability insurance on top of your required homeowner’s insurance if you are renting out your property.
But while the specific cost of your condo is going to depend on your location, the size and perks you are looking for, there are definite guidelines you should follow when starting your condo search.
This is also one of the reasons why you need to make sure that whatever you are spending per month falls into the One-Third Rule. Also before buying, consider the additional fees after purchase, and try lowering your yearly costs by renting out some of your property if they don’t suit your lifestyle anymore. Take these things into consideration and you will be well on the way to affording the home of your dreams!