What to Know About Buying a Condo

For some prospective home buyers, a condo can be a springboard to homeownership. A condominium can be an affordable alternative to a detached single-family home, giving you ownership of an asset that may appreciate in value and can be customized with more improvements than a rental. At the same time, like many renters, you won't have to take care of all the upkeep.

Here's what to consider if you're thinking about buying a condo.

What is a condo?

A condo is a housing unit that's part of a larger condominium complex. The complex could be a multistory building with apartment-style dwellings or a sprawling development with detached units.

One key distinction between condos and single-family homes is that while you own the condo itself, you don't own the land on which it sits. In other words, the walls of your condo and what’s inside them are yours; what's outside (including the building's exterior) is not.

Buying a condo typically means you'll share access to the complex's outdoor and common spaces. On the plus side, that means you may get to use amenities like a gym, lobby, elevator or garage. The downside is that your ability to use or make changes to the areas outside your condo — like planting a garden — may be limited.

» MORE: Compare condos to townhouses

While a single person, company or group of investors owns the condo complex, shared areas are typically managed by the development's homeowners association. HOAs are generally made up of condo owners from within the complex.

HOA members don't have a greater ownership stake than others in the complex, but they do have the power to make and enforce rules. This can include some restrictions on what goes on inside your unit, like how many pets you can have or how loud your music can be.

The HOA also sets the monthly fees that pay for maintenance of common areas. You'll pay HOA fees in addition to your mortgage, so they're an important part of your homebuying budget.

» MORE: Calculate how much home you can afford

Is buying a condo a good idea?

Jan Stern, a Century 21 real estate agent based near St. Petersburg, Florida, says the decision to buy a condo or house ultimately comes down to lifestyle.

"There's more privacy in a house, but there's much more to take care of," Stern says. With condos, "some people don't like that there's a maintenance fee. But would you have a pool, a volleyball court, a tennis court without it?"

She recommends considering what condo amenities you would enjoy — and actually use — and weighing these against the recurring costs of a single-family home.

» MORE: Pros and cons of buying a condo vs. a house