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Starter Home Or Condo: What's The Best Choice For You?

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Starter Home Or Condo: What's The Best Choice For You?

When it comes to where you want to live or can afford to live, you have many options.

For one, you can decide which city, state and even country where you want to live. But that’s only the beginning of your choices. If you want to first try living in different places, you can rent and move often.

When the decision to buy a home is right, people preferring city life often decide condo living is for them.

But when you’re starting out, be sure you take time to understand the differences between a co-op vs. a condo.

If you’ve never lived in a major city, you may not have heard of a housing cooperative, or co-op.

If both exist where you are thinking about living, be sure you know the difference between them.

Not only are these different types of ownership, but the mortgage qualification process is different. Generally, the mortgage process favors condos, but you always have the option to go co-op.

Co-Op, Condo, Starter Home Or Dream Home? 

If you want a single-family home, you still have more choices. As soon as you save a small down payment, you can buy a starter home. Or you can save for a few more years until you have enough for your dream home.

Keep in mind that whether you have a starter home or your dream home, a single-family home means you have yard work and maintenance that doesn’t come with the decision between a co-op and condo.

And there's always the option of renting. If you go with saving longer for your dream home, you’ll still be paying rent instead of building equity through ownership.

Equity is not a small deal. You very well may need a starter home as an equity-building stepping stone into your dream home.

Equity also plays a role in the decision between a co-op and condo, with condos being the more favorable.

Affordable housing in expensive metropolitan cities is the reason a group of people decide to form a co-op instead of a condo organization.

Co-ops sometimes limit the resale value as a way of keeping homes more affordable. That can mean little or no gain in equity value. Always read the governing documents carefully and consider having an attorney explain them to you. 

Your Decision Could Be Based On Your Age 

Where you live is a very personal decision that often changes depending on your age.

When you are young and single, your decision might be between a co-op and condo.

You might want low cost, amenities and common areas to meet other young people. But by your late 20s, you might need that starter home to begin raising a family.

If you already have equity in a condo, you may be able to skip the starter home to move you budding family straight into your dream home.

And then the years pass. The kids get on with their own lives and you’re left with a large, older house needing lots of maintenance.

The circle becomes complete when a low maintenance co-op or condo again becomes the best choice. 

You always have a choice of where and how to live.

Posted-In: Condos MortgagesEducation Personal Finance General Real Estate Best of Benzinga

 

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