I hear the same three things about condos from first-time buyers, and two of them are wrong.
“Condos are a trap.” “Condos never go up in value.” “I might as well keep renting until I can afford a house.”
Here is what I actually tell my buyers: a condo is not a lesser house. It is a different deal. For some buyers it is the smartest first step in. For others it is the wrong fit. The difference is the HOA, the project, and your total monthly payment — not the label on the building.
What you actually own
With a house, you own the lot and the structure. With a condo, you own your unit — the inside walls — plus a share of the common areas: the roof, the exterior, the hallways, the pool if there is one. The HOA owns the rest and maintains it. That is the whole trade: less maintenance for you, less control for you.
A townhome sits in between. You usually own more of the structure — sometimes the whole unit, walls out — and the HOA still covers some exterior and common areas. The exact split depends on the project, so read the HOA documents for the specific place you are buying. Do not assume one townhome works like another.
Two things buyers forget to weigh in that trade: privacy and personalization. In a condo you share walls — and sometimes floors and ceilings — with neighbors, so noise and close quarters are part of the deal. And the HOA can limit what you change, especially on the outside: paint colors, patios, windows, anything the neighbors can see. Inside your unit you have far more freedom, but read the governing documents before you assume you can remodel whatever you want.
The misbeliefs I hear most
“Condos are a trap.” No. A condo with a broke HOA, a special assessment coming, or a project your lender will not finance — that is a trap. A condo with a funded HOA, a clean inspection record, and a payment you can live with is a home. The building is not the problem. The numbers are.
“Condos never go up in value.” I do not have a number I can stand behind for that claim, and I am not going to invent one. What I can tell you is that appreciation depends on location, condition, and the project — the same as a house. A well-kept condo in a place people want to live holds up. A tired unit in a project with problems does not. Judge the specific condo, not the category.
“I should wait until I can afford a house.” Waiting costs you too. While you wait, you are paying rent, and the house you want can get further away. If a condo payment works today and a house payment does not, the condo gets you in, building equity, instead of waiting on the sidelines. You can sell and move up later. That is how most people actually do it — they do not buy their forever house first.
When a condo beats a house
A condo is usually the right call when:
- The house payment does not work, but the condo payment does. In 2026 California, $600,000–$800,000 is a starter / condo / Inland Empire price — Orange County’s median sold price was $1.23M in October 2026 (CRMLS / Realtor.com). A condo is often the only way into the neighborhood you want at a payment you can carry.
- You do not want exterior maintenance. No roof, no yard, no exterior paint. The HOA handles it — and charges you for it, which is the trade.
- You want to be in a specific area — near work, near family — and houses there are out of reach.
- You are buying alone or as a couple and do not need the space yet.
A house is usually the right call when you need the space, you want control over the property, or the HOA dues on the condos you like erase the price advantage. Run both payments side by side and let the numbers decide.
The HOA costs — run them like a loan payment
This is the part buyers underestimate. Take a $600,000 condo on FHA, 3.5% down, 30-year fixed at 6.94%. Before HOA, the full payment is $5,041 a month — P&I $3,896, property tax $625 (1.25% of price), insurance $250 (~0.5% of value per year), monthly mortgage insurance $270.
Now add the HOA:
| HOA dues | Total monthly payment |
|---|---|
| $300/mo | $5,341 |
| $400/mo | $5,441 |
| $500/mo | $5,541 |
At 43% debt-to-income with no other debts, $5,541 a month takes about $154,600 a year in gross income. The same condo with no HOA takes about $140,700. A $500 HOA moved the income you need by about $14,000 a year. That is why I say the HOA is part of the price.
And ask what the HOA covers. Exterior and roof? Insurance? Water and trash? Reserves funded or empty? A $300 HOA that covers almost nothing and a $500 HOA that covers the roof, insurance, and water are not the same $300 and $500. Those answers are different for every project, so confirm the coverage, the reserve level, and whether a special assessment is coming for the specific project before you offer.
What to watch before you offer
- Financing: the project has to be approvable for your loan type. FHA has its own condo approval rules, and conventional and VA have theirs. I check this before you offer — see my Episode 24 post on condo financing for the full breakdown.
- HOA health: dues, what they cover, reserve funding, and whether a special assessment is coming. Confirm all of it for the specific project — it is project-specific, and it changes the payment.
- Your total payment: P&I, tax, insurance, mortgage insurance, plus HOA. Not the listing price. The payment.
- Your exit: if you outgrow it in five years, can you sell it or rent it out? Check the HOA’s rental rules — including any rental cap and owner-occupancy requirements — for the specific project before you buy.
Dat’s take
Do not compare a condo’s price to a house’s price. Compare the payments — HOA included — and buy the one you can actually live with.
What to do with this
- Run the full payment — including HOA — in the Mortgage Payment Calculator.
- Read Conquering Condo Financing: A First-Time Homebuyer’s Guide for the FHA approval and SB326 checks.
- Read How Much Do I Need to Make to Afford a $700,000 House in California? for the income side.
- Then start your pre-approval and I will run your condo numbers with the HOA in them.
Hear me talk through condos and townhomes on the podcast in Episode 23: listen here.
Numbers in this post use the FHA rate of 6.94%. Property tax 1.25% of price and insurance ~0.5% of value per year are planning figures — your county and your quote will differ. Upfront mortgage insurance 1.75% is financed into the loan; annual mortgage insurance 0.55%. This is education, not a rate quote or a loan approval. Dat Nguyen, Certified Mortgage Advisor, NMLS 1379110.