What are you scouting for? A house or Apartment. If you are purchasing for the first time you need to contemplate the advantages and disadvantages of both options. To make your preference easier we have investigated both the condo and house owner. Although the circumstances we put together are derived on an average, we hope they will help you figure on the option best for you.
Hari is considering a condominium.
Hari is a active professional who has been leasing an apartment for a couple of years after leaving the nest. Although some of his friends have moved in other directions, some of his friends still let. His apartment is beginning to feel restrictive and bare. He used to be all right with it, but now he’d like to expand his wings a little bit – get a bit more room to accommodate friends, and have the option of really decorating and getting some nicer furniture. Cutting back on commuting for routine trips such as shopping, going out, visiting is important to Hari as he works long hours. Hari isn't looking for lots of room that needs money and upkeep as he has no hobbies that need it. In the space department, Hari only really wants closet space and a nice flat wall for his flat-screen TV. Modern, sleek and new are his preferences. A garden that needs caring for is a definite no-no. A low upkeep, all included condo with a maintenance person to call on is another need. Hari has his own band of friends so doesn't want neighbours that are constantly visiting. He accepts that racket now and again is part of life. High safety with constant 24/7 security guards is a must. Fitness is important and a condominium that has combined facilities of a gym and/or pool would be an added reward. Hari’s investment conscious, so though he doesn’t have a car, he’s responsive in a unit with parking because it really helps with the resale worth. This is probably not going to be his last move, so resale is important. The future has not occurred yet, so who knows how destiny will change. Apartment life is the clear conclusion for a person at this period in their lives.
A house is Susie's preferred possibility.
Susie is not able to imagine living without having some personal space. From the times at college, she still remembers how it felt having only a thin wall between her and her neighbours, and doesn't want any of this anymore. Having privacy and enough space definitely outbalance the amount of time Susie spends travelling to work, and when it comes to shopping, she takes the SUV and loads it up at the supermarket once a week. When Susie was a child, she used to run around the yard all the time. And this is what she wants also for her own two children, who mean everything to her. The next advantage is that a lot of other families with school age children live around, and it's really useful to know the other parents and consult experience with school sports, the best babysitters and the new off-leash park. And also Susie's family may still grow in the future (although they still haven't really planned it yet with her husband Stuart), they might decide to have another baby or maybe Stuart's mother may need help and move in with them. So they definitely need enough space for the family to expand. Stuart likes to work on his vintage car in the garage and their daughter Jenny is already into playing the drums, which she wouldn’t be able to do in a flat – it gets loud enough in the basement as it is, so Susie’s planning to have it soundproofed and put in a bathroom to make a perfect teen refuge. On weekends, they enjoy having a garden - Susie loves to dig around and pick fresh vegetables as Stuart fires up the grill for a barbecue. For Susie and Stuart, it's also really important that they are owners of the land they live on. If it happens that the roof starts to leak, as last year after the storms, it's still their own roof and they have money aside for such cases. Every house just has to go through some occasional repairs, that goes without doubts. For Susie and Stuart, the responsibility for all the upkeeping work is not a problem. They have divided the work up and they each have their own tasks - Susie cuts the grass, whereas Stuart takes out the recycling. As far as security is concerned, Susie believes that their new system will keep the burglars out of their house. And also there is a residents' association that keeps an eye on what's going on in the neighbourhood. She is just happy in their secure area and wants to live there long-time and put down roots.
Final advice
So which story felt closer to you - Hari's or Susie's? Some people may feel neither of our examples is close to their own life - these may be the ones who would like living in a condo town house, which combines a lot of advantages of both condos and houses.
A maximum of 30% of your net monthly cash flow should be allocated to condo fees, taxes, mortgage and insurance. Have a real estate lawyer look at your contract or inquire with the Homeowners Association (HOA). Make sure that any fees you pay either on a regular basis or at specific times cover you for repairs to the building and facilities. What is included in your fees? If there are extra facilities included do you really want them? You may not have a pet but if this is an issue check to find out if your building allows them. Also ask around to determine what your utility bills may be. Additional bills could increase your monthly expenses drastically if they are not included in your fees.
If you decide to go for a house, our recommendation is that you shouldn't pay more than 25 per cent of your monthly income for the mortgage plus the property taxes. In any way, you will have to pay all for all the servicing needed at the house. You should consider the maintenance costs and your own ability to manage the repairs. All the responsibility, starting with a leaky faucet and ending with a flooded basement, will be up to you. Also the financial and physical costs of commuting is important to be considered, as it will probably increase, especially if your new house is in a suburb. Always ask for a recent home inspection and examine it in detail, so that you won't come across any nasty surprises that would ruin your carefully organized budget. For example, a fixer-upper with an ancient furnace, old wiring and insufficient insulation will demand a more or less immediate cash infusion just to make the house liveable.