There are four types of condo structures that I am going to describe. They are free standing condos, duplex condos, townhouse condos and stacked condos.
Free-standing condos or “detached” condos (also call PUD's)are essentially a house on a small lot. No walls connect a free-standing condo to another structure i.e. the name “free-standing.” Typically this type of structure does not share walls, yard or insurance with others in the condo regime. Generally speaking, the HOA fees are negligible and usually owners have more autonomy than in other types of condo regimes. The reason for free-standing condos is a reduction in the lot size means that a house of similar size would be less expensive than a single family resident on a regular lot.
Duplex condos typically share one wall with another structure/owner and many times the shared wall is the garage. They usually have a yard and are similar to free-standing except for the one-shared wall. Many times a duplex condo is desirable for an owner who wants to live in the inner city but can’t afford the price tag of a single family residence in an urban and highly desirable location. Once again, owners do not share insurance and the HOA fees are negligible.
Townhouse condos typically share 1-2 walls and look like “row or garden style” homes. The owners share common areas including the costs associated with common area maintenance and insurance. Because of these shared costs HOA dues are usually higher and there is usually less control over what you can and cannot do with the exterior of the property.
Stacked condos typically share 2+ walls and are often called mid-rise or high-rise buildings. There is the potential for all four walls to be shared with someone living above, below and next to you on both sides. Once again, owners share insurance and common areas such as pool, fitness center, and any other community amenities. Because of this the HOA dues are higher and owners have little control of changes to the exterior of the property.
So, you might ask, “Why does any of this matter?” In my search for condo clarity I realized that it matters for both buyers and sellers. A lack of understanding about the nuances and benefits of each of these different structures limits a buyer’s opportunity to buy which in turn affects sellers. Additionally, in the current market, there is a perception that HOA’s are “bad” or take “advantage” of owners. While this might be the case in some situations, the majority of condo situations can be highly advantageous to certain types of buyers.
For example, a free-standing condo gives a buyer the opportunity to purchase a home in a highly desirable area that they might not otherwise be able to afford. With that, they have a smaller yard to maintain, lower utility bills, low maintenance fees, low HOA fees and still maintain a high level of autonomy as an owner.
My advice? Don’t be afraid to explore condos. They might be the perfect solution to living in an area that you might not otherwise be able to afford. And for those seeking lower maintenance, lower utilities and less yard work, a condo might just be the way to go.
If you still have questions please submit them as a comment.
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