Thinking about buying a condo in Memphis? Here's what you need to know to get started

Buying a home can be a daunting task, especially for first-time buyers.

There’s a lot of extra costs and maintenance that come with a home, and as prices continue to increase, many are turning to condos.

Memphis may have both an older and lesser number of condominiums than other similarly sized cities, but there’s still plenty of reasonably priced options to choose from.

Thinking about buying a condo in Memphis? Here’s what you should know to get started.

Why buy a condo over a house?

The appeal of condos is obvious: there’s less to maintain. By paying a condo fee, residents don’t have to worry about replacing a roof, painting the building or repairing gutters; that’s on management.

“If you’re a first-time homeowner and you're not used to having your grass cut, your roof blown off, or your gutters cleaned out, all these things that kind of add up,” said Hobson Realtors agent Alex Turner. “With a condo, you’re buying into a community… where they’re taking care of most of those things for you.”

Turner said that while condo insurance is lower than a single-family home, HOA fees can sometimes balance that out. But based on her own personal experience as a former first-time buyer, she thinks a condo is the right choice.

“Sometimes those HOA fees will increase dramatically and seem overwhelming. But at especially in the entry level, I found it's an easier way to handle [homeownership]," she said. "Right out of school, I mean, I lived very much paycheck to paycheck... eventually, I think I was able to get an FHA loan, and put down 4% and get the condo."

What are the biggest differences when buying a condo or a house?

There’s a lot of smaller details to take into account when buying a condo compared to a traditional single-family home.

“You definitely want to be aware of things like what parking is included, what amenities are included, how it's managed,” said Mike Parker, an affiliate broker at local real estate agency The Firm. “If they put money into reserves for bigger ticket items, like replacing the roof, replacing the pavement or repainting the building, that sort of thing.”

When it comes to loans, qualifying can sometimes be more expensive than when buying a regular house. Buyers must qualify for the sum of the mortgage, plus the condo fee, meaning a condo’s listed price can often be deceptively smaller than what a buyer would ultimately pay.

Additionally, certain types of loans cannot be applied for unless the building is approved: for example, a buyer could not take out an FHA loan if the building they want to move into has not been approved for FHA loans.

What are some lower priced options?

Parker said the biggest variety of condos is Downtown, where he estimates there are about 2,500 condos. East Memphis, Germantown and Midtown only have several hundred each, but Parker said Midtown likely has the most affordable condos in Memphis, as flats tend to be smaller in size.

Parker's downtown recommendations include the Lofts at South Bluffs, the Shrine, Machine Shop condos and the Artesian, the newest large condominium in Memphis. He described Potter’s Lofts, Central Station Lofts and Carolina Lofts as sleeper hits.

“They have somehow miraculously kept their condo fees low, kept the places in good shape,” he said. And they have great floor plans… their average two-bedroom two-bath also has… a fireplace, yet they're still affordable, usually under $300,000.”

East Memphis has good lower priced options as well, according to Turner. Whispering Oaks, Audubon Square, Perkins Gardens and the Terraces at Laurelwood are a few lower priced options.

What should I watch out for when buying a condo?

While finding a good realtor is the easiest way to ensure the management is sound, if you’re opting out of hiring a realtor, there are a few things you can check to make sure you’ll be living under competent management.

Ensure there are no approaching special assessments if that’s not in your budget. Special assessments are extra, limited time charges condo owners must pay for specific large-scale repairs like replacing the roof or pavement. Parker estimated that they come up about every three to seven years, so plan accordingly.

Look into any deferred maintenance too – repairs that have been postponed, often due to lack of funds. Deferred maintenance can decrease property value and increase future repair expenses.

While older yet cheaper buildings are tempting to live in, Turner said to be aware of just how rapidly a building is aging.

“Some of the lesser priced condos have some of the higher HOA fees just because it takes that to keep up and old building with old elevators, security, wiring etc.,” she said. “That really needs to be a consideration when looking for a place.”

Jacob Wilt is a reporter for The Commercial Appeal. You can reach him at jacob.wilt@commercialappeal.com.

This article originally appeared on Memphis Commercial Appeal: Where can I buy an affordable condo in Memphis? How to get started