Over the last two decades a new breed of home buyer has emerged, the town home buyer. Townhouses and Condominiums have become permanent fixtures on the home ownership landscape for many reasons. Most notably, townhouses and condominiums offer the tax advantages of homeownership with less of the maintenance burdens. Townhouses and condominiums provide the perfect solution to homeownership for someone who doesn’t have the time or interest in maintaining a single family home but desires to build equity and save on taxes.
First there is the type of situation you are buying into. Most common are Condominiums and Coops.
The Differences Between Condominiums and Coops
Source: Wayne Grover @ Bankrate.com
By purchasing either a condo or co-op, you still enjoy some tax relief and property appreciation, while someone else cuts the grass and takes care of the pool and grounds. But there’s a price attached to it, both in dollars and your sense of independence.The day-to-day life in a condo or a co-op is much the same and the typical resident usually wouldn’t notice any difference. However, there are critical distinctions and what you don’t know could cost you money and lots of aggravation.
There are significant differences between a condominium and a cooperative, but each is considered a common interest development or CID. The terms ‘co-op’ and ‘cooperative,’ are short for ‘cooperative housing project.’ Cooperatives were in existence and common before the condominium scheme of ownership was fully developed in the United States. They were especially common in New York City and the northeast.
In a cooperative , the building containing the residential units or apartments is owned by a ‘cooperative housing corporation.’
In a condominium, each unit owner owns an individual apartment in fee simple. In addition, the buyer owns an undivided interest in the common elements such as the exterior walls, roof, pool and other recreational areas.
Both condo and co-op owners have monthly maintenance fees to pay, but they can vary, depending on what expenses the fee covers. These monthly fees can be significant and should be taken into account when figuring your ability to pay the mortgage or co-op payment. For a closer look at the key differences please click here.
As a practical matter, there is no significant advantage or disadvantage to a cooperative vs. a condominium ownership.
There are pros and cons with both condo and co-op community living. The good part for both is that most of the outside work is done under a contract let by the condo or co-op board of directors. Each unit pays a monthly fee for these services and many associations provide all outside maintenance, including painting, along with water, sewer and cable or satellite TV. Insurance to cover damage to the buildings and grounds — but not the contents of each unit — is also standard. Source: David St. John, a Florida condominium attorney
The downside is that the individual cannot cut back on these expenses if times get tough. Owners on a fixed income may find these monthly fees strain their budget. Any home requires a certain amount of maintenance and if you can’t or won’t do it yourself, you have to pay someone else to do it. But paying for someone else to do it is generally more expensive.
|Typical Unit Owner Concerns source: Housemaster.com|
|AC compressor 6-10 years|
|AC condenser unit 10-15 years|
|Double glaze windows (seals) 10-30 years|
|Boiler 18-25 years|
|Furnace 15-20 years|
|Heat Pump 6-10 years|
|Water heater 6-10 years|
|Faucets/valves 10-15 years|
|Vinyl Flooring 10-15 years|
|Plumbing Fixtures 12-20 years|
|Kitchen Appliance 5-15 years|
|Sump pump 6-12 years|
|Typical Common Elements source: Housemaster.com|
|Aluminum 20-25 years|
|Fiber-cement 30-50 years|
|Vinyl 20-30 years|
|Metal 30-50 years|
|Composition (Hardboard) 5-20 years|
|Wood, Shakes & Clapboard 20-40 years|
|Asphalt 16-30 years|
|Cement 25-50 years|
|Built-up/single ply 10-20 years|
|Metal 30-50 years|