Condo vs. Home - The Heavyweight Showdown

Thomas Harrington

This article was originally an episode of my real estate podcast, The Millennial Homeowner Podcast. You can listen to it here.  

In my tenure as a real estate agent thus far I see first time buyers/ millennial buyers struggle with the decision between a condo and a house for their first home purchase. A house may feel like more privacy and the opportunity to do some work and improve the property and build equity. Alternatively we can definitely be described as the convenience generation and a condo in the heart of the city sounds extremely appealing to some as well.  

Truth be told there is no clear cut answer, sorry to disappoint. I can’t tell you which is the best option definitively but after helping people with many many home purchases of all shapes and sizes I can give you a comprehensive list of pros and cons for each respective type of property. Hopefully you come out of this article today with a better understanding of what best suits your needs.  

Before we begin I want to say if you have any questions at all about condos and/or houses in Edmonton & area, the pros and cons of each, and/or the purchase process please don’t hesitate to drop me a line at hello@thomasharrington.ca or 780-918-8036  

Just to clarify/disclaimer - For the most part when I’m making these comparisons; when I say “house” I’m talking about either a single family home - which can be either a detached home or a duplex. OR when I say condo, I’m speaking about an apartment style condo - whether it be high-rise or low-rise.  

Something like a town-home is typically considered condominium and for the arguments made in this article the pros and cons are more or less split down the middle. Town-home is a relatively healthy mix of everything I’m about to cover, and for the purpose of today’s article I will largely not be talking about them, for the record.  

Before we get into the meat and potatoes, a definition. When it comes to Condominium, I’m often asked what exactly is a condominium. Many people use the terms condo and apartment interchangeably and don’t understand the difference, let alone know there is a difference between the two. Condominium is actually derived from a couple Latin words that means “shared ownership” or “shared property” so a condominium is technically any type of real estate where there is some type of common ownership amongst owners in the condo complex - does not HAVE to be an apartment style building.  

Here are the pros and cons, the good and the bad, the pretty and the ugly, of owning a home vs a condo. Conveniently divided into 6ish categories for you.  

Costs/fees  

To start with the broadest category, generally speaking when it comes to the purchase price; condos give a very affordable option in the suburbs, typically new, still close to schools and amenities, and a good price point without too high of condo fees.  

Generally speaking condos are a bit cheaper than homes. Also when it comes to the “niceness” of them; for example a 300k home and a 300k condo will be quite a bit different, with the later being “nicer” than the former. However this assumption doesn’t factor in condo fees, so when it comes to a monthly cost a 300k condo would generally be more expensive and therein have a greater impact on mortgage affordability.  

The dreaded condo fees - speaking to millennials here; it is likely if you ask your parents and/or grandparents about condo fees they will often say “they’re a rip off”. This is a fairly broad statement and frankly quite misinformed. Let’s dissect these a little further.  

For one, condo fees aren’t just for fun - the money does actually go somewhere. Often a portion of your utilities are paid for through these condo fees, meaning you would pay this cost either way. A more immediate benefit to you is that the condo fees cover the day-to-day and month-to-month maintenance of the condo building. Items such as landscaping, snow removal, common area maintenance, utilities for common areas, etc are covered here. Basically all items essential to the operation of a condo. 

Long term you are paying into your reserve fund. Essentially this is a reserve or contingency fund managed by the condo board/management company to save up for and plan for long term larger maintenance items. Think; window replacement, repaving the parkade, roof replacement, etc - all items that are an eventuality for any condo. 

Conversely, a home has lower fixed monthly costs, meaning you don’t actually have to pay much asides from your utilities, everything is solely managed and controlled by you. This also means you also have to roll up your sleeves and mow the lawn, shovel the snow, clean the eaves troughs.  

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Just an aside - when you’re weighing out the TRUE costs of a condo vs a home, I’ve been recommending clients at least investigate how much it would cost to hire out much of their exterior maintenance. Might actually be a bit cheaper than you think. Perhaps you are able to accomplish the convenience of a condo while living in a detached home Repairs and maintenance To the above point about condo fees supposedly being a rip off, well your money actually goes somewhere. From the breakdown above I’d say the most important place your condo fees go is definitely the reserve fund, and above all it is important to understand your money goes towards tangible improvements The counterpoint to this is that many large projects for a condo such as roof, windows, elevators, etc have very long lifespans. So if you live in a condo for say even 5 years - there is a decent chance you won’t live there to see the benefit of paying your reserve fund contribution So when you purchase a home and the furnace goes, or the roof does not have any useful life left in it and you get slapped with a bill for a few thousand dollars - that bill is yours alone. This isn’t a bad thing necessarily as you will have an idea of the condition of a home and useful life left on all the major mechanics/utilities/etc and although there are many horror stories on the internet, it is definitely the exception rather than the rule. So the good thing about this is that no one is making you pay condo fees, and therein no one is MAKING you contribute to a reserve fund or pay a set monthly cost. But the negative of this is no one is MAKING you pay condo fees. Saving up a slush fund to cover house repairs is 100% up to you and requires a decent amount of discipline. Again, when you move into your first home you typically wont have these repairs to deal with tomorrow and will have a lot of time to save up and plan accordingly as you advance in your career and build wealth for yourself. Control over the condition For a house you can directly affect and control the condition of the property. Maintenance is entirely up to you. Also things like improving curb appeal, landscaping, and lawn care/maintenance are your job. You’re generally not going to be waiting on a management company to handle this and can keep virtually everything about the home the way you like it. The inverse being a condo where yes you can make change to your unit (for the most part) and decorate etc but the building in itself is a collective effort. Ultimately with a condo all decisions, particularly the larger ones, are made at the board level. This means there is a vote and group consensus. Not inherently bad but other people have an equal voice to you as an owner as well. You also do give up a level of control and choice to the management company - which is often for the best as they typically know what a condo needs and doesnt need to be well run, when repairs should be done, how to prioritize condo repairs and maintenance, and keep the ship sailing smoothly. A general tip and aside for condo owners; there’s a bit of a saying out there that “everyone wants to live in a well managed condo, but no one wants to be on the board”. How to solve this problem? Join your condo board! Condo boards are made up of volunteer owners and are a great opportunity to have your voice heard and help ensure your building is well run. Meeting are also open to all owners and I highly recommend attending as regularly as you can. Resale value Central location a is plus for condos in these areas. Especially in a city like Edmonton that sees continued growth and urban sprawl, meaning suburbs are further and further away from the core entertainment areas. Generally speaking your downtown high rise will always be just that, a downtown high rise. However, central condos are not entirely recession proof. Edmonton is NOT a “build it and they will come” type city. Many newly constructed condos in recent years have a significant number of unsold units - therein driving down prices at the developer end which puts downwards pressure on not-so-new condos. We see this with mid 2000 downtown condos specifically in Edmonton. Places built around 07ish if not a touch earlier are a bit more cookie cutter by today’s standards - lack the floor to ceiling windows and some building amenities, glass exteriors, etc. These mid 2000 buildings overall have taken the biggest hit in recent years as buyers have the option to buy a new or relatively new condo in trendy areas. Part of this factor is that the ICE districts wasn’t a sure thing and it is unlikely anyone could have really predicted this even 10 years ago and there isn’t really another Canadian city seeing this much of a dramatic change to downtown.  

This is a plus for buyers as you have a great opportunity to buy into the action, and it will be interesting to see the long term economic growth caused by the ice district and how it brings up the surrounding areas. 

To the above, the more central a house the better it will hold value and more likely to appreciate. If you’re hoping to build wealth long term on your first home, a decent strategy would be to invest in a more up and coming area. Ultimately we can predict the path of infill in the city as developers continue to expand and “spill over” into new and different areas. In theory you could live in and enjoy a home for a few years, build equity, and ultimately sell for a healthy increase  

Now just to directly contradict myself here - don’t buy a HOME (that’s home with a capital H) - whether condo or house - to get rich or make a bunch of money. Make a smart investment and don’t overpay, but it truly takes a long time for real estate to appreciate to such a point that it will see an increase in value to profit from the sale. Instead, it is better to focus on finding the right home that will fit your needs, check the boxes to ensure it is good value, and ultimately build equity long term. I often talk about “The Bank of Your House”. You have to pay to live somewhere. If you live in a place for even 5 years you will save up a decent amount of equity. If you made a smart purchase your area will likely have appreciated if not held value well and then you can pull out thousands upon thousands on equity.  

By all indicators - we will likely never see the appreciation our parents did - ie; your parents may have paid 100-200k for their home in the 70/80/even 90s and could sell for at the very least double that if not much much more. So what do we collectively do as a generation? Well I would say always buy for long term growth. Find a home that fits your needs but covers your bases from an investment point of view.  

A wise mentor once told me; buy a home because its 50% a good investment, and 50% because you love it and can see yourself living there - always have felt this was great advice and would recommend you keep this in mind on your next home purchase  

Lifestyle & Lifestyle Design  

It is said that we, the millenials, are the convenience generation. Looking at the surge in convenience & del&very apps, websites, companies, and the like I think we can all take a step back and admit this is true. Ultimately a large factor in the debate between a condo and house is going to be lifestyle design.  

Want walkability, close to restaurants, shops, entertainment, nightlife? Central location for sure, and more likely a central condo  

Enjoy handiwork? Tinkering around the house? Yard work? A home in the suburbs with a large yard is something to consider  

To the above, street noise is a decent factor to think about too. Jasper Ave would be cool to live there but you’re going to have significantly more street noise than say 215st in the west end. Perhaps a healthy mix would be a more suburban condo for a lower maintenance option and a much less busy area.  

Newness  

This may be obvious, but how new a property can vary a lot across property classes but at a certain price point.  

Under 300k? Great options for condo and townhomes if you want something moderately new, if not brand new  

However a detached home at this price point will either be a) older and need a bit of work (not a bad thing!) or a smaller newish one. 400k  

More options for a relatively new or new detached home. Condo options open up a lot particularly for higher end options Generally speaking you can see how the scales even out as you get higher in price. Price isn’t 100% correlated with how new a home is, but generally speaking how much you are looking to spend on your first home will determine this.  

In Summary  

Overall this is not in any way meant to scare you out of one type of property or not. Ultimately my goal here was to present both options as objectively as possible. This is not a definitive guide of which option is better, but understanding the realities of purchasing different types of properties.  

There are many pros and cons to each, and the largest determining factor is 100% you the buyer. What do you want? What do you need? Where do you see yourself in 5 years? Are you willing to do some work to your home? How much of your free time are you willing to dictate to home maintenance?  

Ultimately if you do anything or take anything away from this article; when you’re purchasing a home, go through that list of questions. Whether by yourself or with your significant other, go through and have a very honest conversation with yourself of where you fit. This will give you better guidance.  

So there you have it, buying a Condo vs a House for your first home (or next home). If you’re looking in the Edmonton area to make a move don’t hesitate to contact me at hello@thomasharrington.ca  

If you enjoyed this post and want to see more like it, I'd encourage you to subscribe to The Millennial Homeowner Podcast on your favourite podcast platform.  

https://anchor.fm/the-millennial-homeowner-show  

Cheers!  

Thomas Harrington

SellerInvite Edmonton - Thomas Harrington

About The Author

Hi! I'm Thomas and I'm your Low Fee Edmonton Real Estate Professional. Early in my career I realized that the methods of much of the realty industry were extremely dated and charged outrageous commissions. I chose to make a move that allows me to better serve clients at a much more reasonable rate. I am committed to saving every client thousands on fees in every transaction, buy or sell. Get in touch today!

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