Demand and inflation have 2019-2022 skyrocketed prices beyond the record from the Great Depression. With a cheaper base cost, condos have become the new craze.
To help you choose, we’ve discussed the 4 types of condos available in the US, including what states they are frequent in.
Condo homes are privately owned housing units. You own the interior space. Exterior spaces like stairwells, hallways, driveways, and roofs are managed by a committee for a fixed, low, fee of around $200-$500.
These condos start from only $100,000 or even less. But they have a consistent positive value when appreciated. 2005-2010 saw an 8%-10% increase, 2011-2014-2015 saw 2%-7% and it came to a 22% total increase by 2017.
- Cheaper than single-family homes.
- Committee maintains the exterior.
- Fixed and low maintenance fee.
- Consistent, positive appreciation value.
- Steeper mortgage rates.
- Most have a no-rent policy.
- Enforced rules and regulations.
- Cannot modify or control exterior.
Condo homes are good replacements for single-family homes. But they’re not meant for renting, and the mortgage rates can cause you to pay nearly as much as a house. Condo homes are most popular in Florida and Illinois.
Recently, big names in architecture such as Kengo Kuma, OMA, Zaha Hadid, and BIG Architects have also invested in luxury condos in Miami.
Detached Condos are physically separate housing units with a shared space. It can contain gyms, pools, parks, and more, which are managed by an HOA. It is a private space for living, with plenty of opportunities for socializing.
A detached condo can cost as low as $100,000, with scaling value appreciation. You can easily and profitably sell it a few years later. Also, you can save money on the gym, pool, and other memberships, and you don’t have to handle maintenance. But the HOA can randomly charge you higher for no real reason.
- Saves on lifestyle activities.
- Socializing opportunities.
- HOA handles maintenance.
- Control over the condo.
- Low cost.
- Scaling appreciation value.
- Easy and profitable selling.
- Possibility of nosy neighbors.
- The HOA can adjust fees randomly.
Detached condos are ideal for living, and you can sell them at a profit later. Also, lifestyle and maintenance costs are significantly lower. These are popular in Connecticut, California, and Ohio.
Shared condos are renting spaces for tourists, and vacationers. These are seasonally occupied and rarely have facilities like pools and gyms. They are liked for the low rent and custom booking.
You can profit heavily from these condos on Airbnb, but there are drawbacks. Owning a shared condo will cost $300,000 and above, and selling is hard. Maintenance costs over $800, with added personal effort.
- Best for Airbnb.
- Can rent to multiple tenants at a time.
- No hassle of long-term contracts.
- Easy advertising for tenants.
- Simple financial management.
- High purchase cost.
- Hard to sell.
- High maintenance cost and effort.
- Tenants can leave a mess.
- Seasonally active.
Owning a shared condo is best left alone if you can’t own multiple units. These are vacation homes, and uncomfortable for living long-term. You’ll find shared condos everywhere in the USA, but mostly in Tennessee, Georgia, Connecticut, and New York.
Private condos are rental spaces for long-term renting single families. You have to handle the interior, amenities, and maintenance, though amenities and interior are one-time costs.
In New York, a 1-bedroom private condo can make you $3,495 per month but it will cost $500,000 or more to own. You’ll save by going to other states, but expect rent to be $1000 or below. Considering maintenance costs and effort, it’s better to own a costly private condo and charge high rent.
- Long-term contracts only.
- Fixed passive income.
- High ROI potential.
- Manageable maintenance cost and effort.
- High sale price and demand.
- You set the rules.
- Low-value condos can lose money.
- Location determines value.
- High amenities and interior setup cost.
Owning multiple luxury private condos can be a large passive income source. Pricier units can pay off their mortgage and make a profit. However, low-value or foreclosed private condos are better for living. Private condos are common in New York, South Dakota, and Louisiana.
So, What Is The Best Condo Type? And Where Can I Get It?
Of all the types of condos available in the US, detached condos will serve you best. Since 2005, they’ve had a steady 30% scaling increase till 2019. Selling only 5-6 years later will get you a 5-6% profit at least, and there’ll be no lack of interest.
Condos in Torrington, Connecticut are the best, with quiet, kind neighborhoods and well-regulated HOAs. You can buy one in the $100,000-$200,000 range even in 2022. The low cost, fees and environment make it the perfect home for anyone.
Condos are in high demand right now, but the other shoe is bound to drop. There are more than 400,000 units up for sale, and the market is inflated. Only consider condos for renting and living. And go for multiple units or a luxury private condo or detached condo if you want reliable passive income.