When it comes to choosing the right type of property to buy, especially if it's your first time, the options can be fairly confusing and overwhelming. Depending on your individual circumstance, different property types suit different people, but the main three options are condos, freehold properties, and co-ops. Understanding the basic characteristics of each property type will help you make a more informed decision about purchasing your next home. Our friends at Zoocasa explain the differences:
Condos typically refer to apartments or townhouses in a multi-unit building or complex where each unit is owned by a single owner. The main advantage of owning a condo is that you don’t have to worry about much of the maintenance, as it is the responsibility of the condo association, however, you will have to pay monthly condo fees to cover the general upkeep of the building. This can range from $50 to $1,000, depending on the size and number of amenities the building offers.
Condos are ideal for buyers who want to own property but either have limited resources to take care of maintenance or who want to enjoy various amenities, such as pools or saunas. Although generally more affordable than detached homes, in larger cities condos can sometimes cost more or close to freehold properties when taking condo fees into account, so it's necessary to do some research and budget accordingly.
Freehold properties are traditional homes that you own completely. In other words, you have complete control over the land and its home. These can be detached, semi-detached or townhouses, and they offer the most flexibility for buyers. At the same time, they also require the most significant level of upkeep and are generally the more expensive option with higher closing costs.
Freehold properties are ideal for buyers who are responsible and ready to be decision-makers. From fixing leaky roofs to cutting the grass, the maintenance of the home will be in your hands. That said, ownership of a freehold property can give great satisfaction as you know you hold complete control of your living space.
Co-ops are similar to condos, but instead of buying a specific unit, you purchase shares in a corporation. These shares entitle you to live in a particular apartment. Co-ops tend to require more extensive credit checks and buyer interviews, so the process can be longer and less predictable. You’ll also have to follow the rules and regulations the co-op board sets.
Co-ops are ideal for buyers looking for an affordable entry point into the real estate market, as co-op ownership tends to come at a lower price point. Co-ops also provide residents with a sense of community and could be a good option for people new to a city.
No matter which property type you choose, it's important to evaluate the pros and cons of each one to determine the property type that best suits your needs.