A condominium or condo or condos is an apartment in a complex that is owned rather than rented. They can range from studio size apartments to penthouses. The main idea conveyed by the term “condo” is ownership. Why should one invest in condos instead of a single family home? And, is it better to buy or rent a condo? Read on to learn the answers to these two questions.
Acquiring a condo is an opportunity to invest in real estate. You are allowed to pay an amount every month in exchange for equity. As opposed to paying rent with no financial benefits, every time you pay the mortgage, the equity in your asset increases while the liabilities decrease. Instead of waiting for the price of a condo to go up before you sell, you can begin to earn by renting out units. Condos are a very good investment in Ottawa, especially if it is located close to a tourist attraction. The money made from renting out the units for a few months can cover the cost of maintaining the entire property for a whole year.
Apart from enabling you to build equity, a condominium unit enables you to take advantage of tax deductions in the name of mortgage interest and property taxes. In some cases where the cost of renting is not so different from your monthly mortgage payment (especially after including the cost of renters insurance on top of the monthly rent versus an HOA fee), it may be better to buy instead of rent. Also, while your rent is very likely to increase, a mortgage payment will remain the same all through the loan repayment period.
Ease of Maintenance
A major problem with house ownership is maintenance. This is an area where it pays to own a condo. Condo owners are not directly responsible for the building maintenance and common areas or grounds. This frees up your time and some money to enable you to engage in other pursuits. Generally, your monthly condo fee takes care of all repair and maintenance expenses apart from the individual units. Imagine owning a home and having someone else unclog the toilet, fix the dishwasher, or adjust the hot water heater.
With a condo, you can have access to certain amenities that you wouldn’t have been able to afford on your own. Condo developments may include tennis courts, swimming pools, golf courses, clubhouses, and fitness facilities.
Condos are often cheaper and easier to buy and sell than other types of real estate. Unlike a single-family home, a condo will most likely be smaller and have fewer rooms and hence, be less expensive. Also, condos are often much less complicated to buy and sell than co-ops in certain markets.
Condos Allow Great Flexibility
When it comes to flexibility condos are some of the best home investments. A condominium requires much less maintenance than other homes types. It is easy to quickly find someone to rent it or leave it vacant while you away. Unlike co-ops that you can’t sublet in some cities like New York City, you can sublet your condo when on six-months leave, for example. Condos are a great deal for people who travel very frequently.
If your job requires you to move around a lot, such as the military, you may want to consider market factors at the time of purchase/rental. You could get a condominium unit for a fraction of the price of a single family home in a luxury location. Also, renting may appear a smarter choice in a poor housing market, but make sure that you have factored in all the benefits of owning one instead. The benefits of homeownership, some of which has been listed above, will often tip the scales toward home ownership.