To Invest in a Condo or a House?

There’s no question that Los Angeles is a big city with a vibrant (and expensive) real estate market. If you are in a position to buy now or in the near future, you may be asking yourself - where do I even begin? I recently met up with a friend of mine who wanted to learn more about the home-buying process. During our chat, she asked an important question - How do I choose between a house or a condo? Deciding between the two can be challenging, as both offer different lifestyles and investment opportunities. Let’s dive into the pros and cons of buying a house versus a condo so you can make an informed decision.

Buying a Condo

PROS:

AFFORDABILITY

Condos in LA often come with a lower price tag compared to single-family houses, making them more accessible to first-time buyers or those with a tighter budget. If you have a budget of $1,000,000, you will likely be able to stretch it farther with a condo than you would a house. That budget could very well get you a nice, updated condo…but a house for that price in LA? You’re probably looking at something a lot smaller that needs work, and may not be in the areas you're looking at.

AMENITIES

Many condo complexes in Los Angeles offer a range of amenities such as pools, gyms, security services, and communal spaces, providing residents with added convenience and luxury. Some nicer condos can have you feeling like you live in a hotel! When determining your budget, you may be able to trade your gym membership for a condo with a gym. And of course the added security of being in a condo is a huge plus, especially as a woman.

LOW MAINTENANCE

Owning any property comes with maintenance, but condo living typically involves less maintenance compared to owning a house. Exterior maintenance, landscaping, and repairs are usually managed by the homeowners' association (HOA), freeing up time and money for residents. The only maintenance you’re responsible for is within your actual unit.

LOCATION

Condos are often located in prime areas of the city near restaurants, shopping centers, etc. making them ideal for those seeking a convenient lifestyle. If you’re currently renting an apartment in a prime area of LA and want to have a similar experience, you can likely find a condo complex nearby. Whereas finding a house in that area (and at the same price point) may be more difficult.

CONS:

HOA FEES

If you are looking to buy a condo, you’ll have to consider HOA fees into your overall monthly cost. These are the fees that residents pay monthly which goes towards maintenance of the building and any improvement projects. HOA fees can add up significantly over time and may increase over the years, impacting your overall housing expenses. HOA fees in Los Angeles can range significantly, from $400 / month to well over $1,000.

LIMITED PRIVACY

Living in a condo means sharing common spaces and walls with neighbors, potentially compromising privacy compared to a standalone house.

LIMITED CUSTOMIZATION

Condo owners have limited control over exterior modifications or renovations due to HOA regulations, which can restrict personalization options. If you are looking into buying a condo, it’s always important to understand what the HOA restrictions are. Some may be more strict than others.

RESALE VALUE

Buying your first place, whether it’s a home or a condo is a huge investment. As with any investment, it’s important to understand what you’re getting into. In areas with a high concentration of condominiums, condos may appreciate at a slower rate compared to houses due to factors such as oversupply, perception of value favoring houses, potential for maintenance costs and depreciation, and differences in underlying land value. While condos may appreciate slower than houses and may not offer the same level of long-term investment potential, it doesn't necessarily mean they're a bad investment. Condos still have their merits, such as affordability, convenience, and access to amenities, making them attractive options for certain buyers.

Buying a House

PROS:

PRIVACY AND SPACE

This goes without saying, but houses come with the privacy and space that condos don’t. If you want a yard and don’t want to share walls with neighbors, a house is a great option.

CUSTOMIZATION

Unless you buy a home in a neighborhood with an HOA, you pretty much have the freedom to customize and renovate your property however you’d like. Plus, you can also add resale value by updating and enhancing the home.

APPRECIATION POTENTIAL

Houses in desirable neighborhoods of Los Angeles have historically shown strong appreciation rates, offering the potential for significant returns on investment. I’m sure you’ve heard stories of people who bought their homes for $200,000 and they are now worth millions. Houses are often perceived as offering better long-term value than condos due to factors like land ownership, privacy, and customization options, which can influence buyer preferences and resale values.

CONS:

HIGHER COSTS

All of those pros sound pretty good, but purchasing a house in Los Angeles typically requires a larger upfront investment compared to buying a condo, including higher down payments, property taxes, and maintenance expenses.

MAINTENANCE RESPONSIBILITES

Homeowners are responsible for all maintenance tasks, including repairs, landscaping, and upkeep, which can be time-consuming and costly. Unlike a condo, you’re in charge of the inside and outside of your home. So, if you need a new roof you’ll be shelling out some cash.

LOCATION LIMITATIONS

Houses in prime locations of Los Angeles often come with a premium price tag, limiting options for those with budget constraints or specific location preferences. While you may be able to get a condo for around $1,000,000 in West Hollywood, you’re probably not finding a home in the same area for that amount.

LIMITED AMENITIES

Unless you are buying a home in a community with security and a recreation center, you’re not going to get the same amenities in a home as you could in a condo - especially for around the same price. In addition to your monthly home payment, you’ll either have to keep that gym membership or get a Peloton.

In Conclusion…

The choice between purchasing a condo or a house in Los Angeles ultimately comes down to personal preferences, financial considerations, and lifestyle priorities. While condos may appreciate slower than houses and offer different investment dynamics, they provide affordability, convenience, and access to amenities that can suit the needs of many buyers. On the other hand, houses offer greater autonomy, privacy, and potential for customization, appealing to those seeking a more traditional homeownership experience. Whether you choose to invest in a condo or a house, the Los Angeles real estate market presents rewarding opportunities for homeownership and investment in one of the most dynamic real estate landscapes in the world.