Are you ready to purchase a home but not sure what property type will best suit your needs? We are here to help you make the decision that is best for you!
Check out the pros and cons of buying a condo vs. a house in Chicago.
Pros and Cons of Buying a Home
Purchasing a single-family home is a big financial move. It is one that many people plan and save up for, but is buying a home the right move for you? It is an investment that requires weighing both the pros and cons.
So what are the benefits of owning a detached home?
- Space: A home usually provides more space than a condo or apartment. You can expect more square footage inside, possibly more floors and a backyard or garden outdoors.
- Privacy: Along with more space, not sharing a wall and having your own yard guarantees some added privacy, further from neighbors. This can bring an added level of peace and quiet.
- More Freedom: When you don’t co-own a space, you have a lot more control over what you do with your property and how you take care of it. There are more possibilities for renovation and expansion.
While many people enjoy homeownership, it is important also to be aware of the disadvantages to purchasing this property type:
- A Higher Purchase Price: While detached homes provide more space and freedom, homeowners pay for these perks. The asking price for single-family homes is typically higher than that of condos.
- More maintenance: Unless you decide to hire someone to maintain the appearance of your home, that is a cost and job that’s on the homeowner shoulders.
- Housing taxes: Single-family home taxes tend to run higher than condos because the value of these properties is also higher. So be sure your bank account is prepared for these additional expenses if you are considering buying a home.
There are plenty of reasons why a condo makes an ideal first home. First and foremost, you will find that most condos are more affordable than single-family homes. In fact, condos tend to be priced 10 to 15 percent lower than single-family homes.
Because condominiums tend to cost less, the amount of money needed to put down on a condo is also lower than what is required to purchase a single-family home. With a good credit score, you can typically put just three to five percent down. This can make buying your first home much more attainable.
If you have never owned a home before, a condo makes a fantastic first purchase because it requires less home maintenance than a stand-alone home, which can alleviate extra work and stress. HOAs manage condos and typically take care of a lot of the outside work and maintain amenities or community spaces.
Along with being more cost-effective and less maintenance, condo ownership comes with additional perks:
- Convenience: Many condos, especially in downtown Chicago, offer a central location with proximity to city living. Condo residents often find themselves within walking distance of parks, grocery stores, retail shops, and public transit.
- Amenities: Shared amenities attract many potential condo buyers. Why wouldn’t you want a pool, gym, and community clubhouse all just a few steps away from your home? While amenities vary depending on the condo, you can choose which amenities are non-negotiable during the browsing process.
- Community: Condo living can help create a tight-knit community. With residents living close to one another, it’s easy for neighbors to connect simply by crossing paths or when using shared amenities.
- Security: It is not rare for Chicago condo buildings to provide security measures. Some buildings offer surveillance cameras or 24/7 security guards to keep an eye on the people coming and going. Living in close proximity to others also means that if there were an emergency, you would have plenty of people to turn to.
While condo living comes with many benefits, there are also some downsides to keep in mind:
- Shared walls: Living in a condo means you are bound to share at least a few walls or floors with neighbors. That is why corner units or units with soundproof walls are favorable.
- Lack of privacy: While condos open up opportunities for a great sense of community, if you prefer distance between your neighbors, then condo living may not be for you.
- More rules: Condo owners have to abide by the rules and regulations set by the HOA. This may limit what they can do inside and outside their unit, including painting or adding exterior features.
- More fees: HOA membership also comes with monthly dues that owners are obligated to pay. While these expenses fund extra maintenance provided by HOA, not everyone is a fan of the increased costs.
Among the many benefits of purchasing a condo includes the condo’s investment potential and resale value.
The resale value is what a buyer in the market will pay for your property. Generally, condos tend to sell more quickly than single-family homes even in a down-market because of lower costs.
While it’s often said that detached homes typically appreciate more than condos, meaning that their value increases more over time, this is not always the case. In fact, over the last decade, condos have routinely outpaced single-family homes in appreciation.
Additionally, Chicago appreciation has proven that the Windy City is an excellent market for condo investments.
If you are leaning more toward a single-family home, rest assured that the Chicago real estate market remains competitive and favorable for these property types as well. Strong economic and job growth make Chicago an ideal place to invest, whether you decide on a condo or home.
Whether you purchase a condo or single-family home, you will find that this significant purchase comes with unique tax benefits.
Owning residential property is a great way to reduce your final taxes because the IRS automatically qualifies homeowners for various tax breaks. This is one of the ways that the government has promoted Americans to purchase homes.
Additionally, if you decide to use your condo or home as a rental property, you do not owe taxes on the earned rental income.