About Condominiums, Lofts and Townhomes
|Why own a Condo?
There are many reasons to buy condominium, loft or townhouse instead of a traditional single-family home. Find out some of the most important advantages of condo ownership in Austin.
|Condos, Lofts ,Townhouses...
What's the difference?
There are differences in the way condos, lofts and townhomes are owned and especially how they are maintained. Read more about those differences here.
|Austin Condo Market Statistics
Do you want to know how well condominiums, townhouses and lofts appreciate over time? Do you love data? See the monthly and yearly sales statistics for these types of real estate in the Greater Austin area.
Why Own a Condo?
There are many advantages to owning a Condominium or Townhouse rather than a single family home, and we’ve listed the most important ones here. Condominiums and Townhouses are very attractive investments for people of all ages whether they intend to occupy the property, rent it out as an investment or use it as "student housing" for their college age children.
Advantages of Condo/Townhome/Loft ownership:
- Low Maintenance
- No matter what your age, some folks just aren't interested in mowing the lawn or painting the house in August (or any other month). In condo and townhome developments, there is typically a property management company that takes care of exterior maintenance. This varies by development, so check to find out exactly what is taken care of. The nice thing is, you can take off for months at a time and not worry about yard work or cleaning the gutters. You're free to concentrate on the inside of your home, vacation as long as you like, and read a book instead of sweating in the hot August sun.
- Wouldn't it be great to have a pool and not have to take care of it? about a tennis court? Or a clubhouse where you could host parties? Many condominium and townnhome complexes provide these amenities for your enjoyment. You don't have to maintain them. You just get to use them.
- Good Resale Market
- There is a very good resale market in the Austin area for condominiums and townhomes. In fact 2006 sales in the Northwest Hills area alone were 5% higher than for 2005. Researchers are predicting this trend to continue at an even higher pace. Consider as well all the loft development going on in the downtown area. There is a very good market for properties of this type.
- Tax Advantages
- Did you know you can deduct mortgage interest on a second home? If you divide your time between two parts of the country (or even two parts of Texas!), or you own a condominium that your dependent student lives in you will be able to take this deduction. This helps you absorb the cost of owning two homes.
- Great Rental Properties
- What if you don't want to live in a condominium? Or you bought one for your college student who has graduated? Or you used to live in one, but now you're moving? One of the great advantages of having a condominium as a rental property is that you can base depreciation on the entire value of the property - not just on the structure or "improvement" as it is called. Talk to your accountant about your particular scenario. In addition, you will be using other people's money to pay for your investment and build your equity. If you started with a low down payment, the future payoff could be very high. And someone else maintains the property's exterior - saving you and your tenants the trouble.
Condominium, Townhouse, Loft.... What's the difference?
There are two factors to consider when you're thinking about the terms Condominium, Townhouse and Loft. The first is ownership and the second is style.
The legal description of any property will tell you if it is a Condominium or a Townhouse. Condominium legal descriptions typically contain a Unit Number, and the legal descriptions of Townhouses usually contain a lot and block. Basically, with a Condominium you own "the space between the walls, floor and ceiling". With a Townhouse, you own the entire structure and also own the land underneath the structure (which is defined by the lot and block). There is no special legal designation for a Loft. These are typically Condominiums in terms of ownership.
For both types of ownership, there is usually also a percentage ownership interest in the responsible for maintenance inside the unit. This includes heating and air conditioning, plumbing, electrical, appliances and flooring, etc. The Condominium owner is not typically responsible for any kind of exterior maintenance. A Homeowner's Association typically manages the entire property and has a budget that is used for maintenance items such as roof replacement, gutters, exterior paint, siding, fencing, etc. The funds in this budget come from each owner's Monthly HOA Dues.
Townhouse owners, on the other hand, are more likely to be responsible for at least some - if not all - exterior maintenance. This is because they own the entire structure - not just "between the walls". Townhouse properties usually have a Homeowner's Association as well, but their duties and responsibilities are typically focused on the maintenance of the Common Areas.
Each complex varies in what their HOA is responsible for, so it is important to read and understand the HOA's By-laws before purchasing.
You can't necessarily tell if a property is legally described as a Condominium or Townhouse just by looking at it. A property may look like a Townhouse, and actually be a Condominium.
Stylistically, a Townhouse is a structure with walls adjoining a neighbor's walls. A "Townhouse" is contrasted with a "Country House". Country Homes typically have a lot of land around them, and Town Houses do not. A Townhouse can be single or multi-story. Sometimes Townhouses are free standing, have no walls that adjoin a neighbors, and strongly resemble single family homes.
Stylistically, a Loft is - well - Lofty. It is a space that is above something else - like a business. The term conveys open space, high ceilings and a plentitude of windows, although this is not always the case. In Austin, lofts typically have no interior walls.
Condominiums bring to mind Co-Ops and high-rises, but they come in many forms. Some condos even look like single family homes. In Austin, many apartment complexes have been converted to condominiums. These are typically one to three story structures with ample parking.
Putting it all together
Check the legal description and don't depend on how a property looks or is advertised. A Loft is probably a Condominium, and a structure that looks like a Townhouse could be a Condominium as well!