Condo Vs. Townhouse: Which Should You Buy?
Detached single-family homes, like townhouses and condominiums, are some of the most popular types of dwelling in America. They tend to be great starter homes and are often less expensive than a single-family home.
Both options also provide less responsibility for the exterior or landscaping since a homeowners association (HOA) usually handles that, and then you pay it through a monthly HOA fee. While you’ll likely have less space than you would in most single-family homes, a townhouse or condo might be a better fit for your budget if you want to live in a particular area and still own a home.
Choosing Between a Condo and a Townhome
Deciding whether to purchase a townhome or condo will depend on many factors, including cost, how much space you’ll need and whether you want to live in a dwelling that’s similar to a single-family home.
Two things that condos and townhomes have in common:
- Your home will be connected with at least one of your neighbors’ homes.
- You will be part of a HOA that is in charge of common areas and amenities.
Living in a condominium can more closely resemble living in an apartment than a single-family home. You’re likely going to live in a unit that’s surrounded by neighbors— possibly on all sides—and you might need to climb stairs or take an elevator to access your home.
A few advantages to this type of arrangement include:
- More amenities. While townhome communities have common areas and might offer a pool and clubhouse as part of an HOA, it’s possible you’ll find more amenities in a condo community. For example, there might be a rooftop recreation area, fitness center and/or dining options.
- Proximity. If you want to live near an entertainment district or walk to shopping and restaurants in a downtown area, a condo might be the most cost-effective way to do it. Buying a condo in a city with convenient public transportation options allows you to get to work without using a car and be able to stroll to nearby restaurants, theaters and more.
A townhome may be the best choice if you would prefer to live in a place that resembles the size and look of a single-family home.
When you walk into some townhomes, it can feel like you’re in a detached single-family home because there’s usually not a neighbor dwelling above or below you. The townhome style could be a one-floor ranch or be distributed over three or more levels.
Here are a few other advantages of a townhome when compared with a condo:
- You own the land. While your townhome will be surrounded by neighbors’ homes and common areas controlled by the HOA, you own the area where your home sits. The responsibility of the interior is up to you. Upkeep of the exterior could be split between you and the HOA. For example, the HOA might handle maintenance of the siding, roof and driveway while you’re responsible for the windows and deck.
- More privacy. While your home will be connected to at least one neighbor, you won’t have one above or below you as you might in a condo. Also, it can be easier for people to find a quiet private area to work in a townhome, as there can be one or more floors in between a person in a home office and a basement where kids are playing, as an example.
- Outdoor access. You can easily walk out to common areas in front or in back of your dwelling, which helps if you want to have a barbecue in the front of your house, host a party on your back deck or walk your dog out the door.
Understanding Your HOA Fees
Before you decide whether to buy a townhouse or condo, you’ll also need to consider the cost of HOA fees. You might be impressed by the array of amenities in a condo development, for example, but the monthly HOA fees could put a major dent in your budget.
HOA fees can range from about $200 to several thousand dollars per month. While fees for both townhomes and condos typically cover the outside dwelling, like lawn upkeep, each HOA will have their own breakdown of items like who takes care of the roof, siding and balcony.
Be sure to check the HOA rules, regulations and restrictions on a home before purchasing. Also, condo dwellers can sometimes pay higher fees because there might be more community features and activities within the community than a townhome.
It’s important to note that HOA fees are not static—they can go up every year. And additional assessments can be levied if the HOA needs to pay for a major project or significant recovery from storm damage.
What Amenities Can I Get With a Townhome or Condo?
Both townhome communities and condo buildings offer amenities for their residents which helps generate buyer interest and makes it more convenient for residents to enjoy a variety of activities without leaving their neighborhood.
Some popular features are:
- Pools: Whether outdoor or indoor, a pool can be attractive to all ages, especially if it’s difficult and/or expensive to find others nearby.
- Rooftop entertainment: Condo building owners might open up a rooftop area for socializing, barbecues, games and more.
- Clubhouse/meeting areas: Expect to see a variety of uses for clubhouse space like a game room, fitness area and children’s activities.
- Security: Some townhome communities might be gated, requiring a pass and possibly a security guard. Some condo buildings will feature a secure main entrance, possibly with a security guard, plus a doorman in more upscale urban areas.
Know the HOA Rules and Regulations
All HOAs will have a document of Covenants, Conditions and Restrictions (CC&Rs) that provides guidelines for protecting and maintaining the building or neighborhood.
You might find that condo HOAs have more to cover in their C&CRs because everyone is living in the same building. For example, they might need to crack down harder on noise than in a townhome community, regulate behavior in common areas and specify how residents can dispose of garbage in the building.
In townhome communities, rules might focus on exterior appearance—such as regulating what types of changes residents can make to their property—as well as parking on neighborhood streets.
Other Costs and Fees
There are other costs and fees you should plan for when buying a townhome or condo that the HOA board or your realtor should disclose.
For starters, you will need your own home insurance to protect the items within your house. Policies for condos and townhomes will differ on this, as the townhome owner might also have some responsibility for the home exterior, such as the deck.
You also need to make sure you have some wiggle room in your budget in case HOA imposes an extra fee or a special assessment down the road. For example, if there is a major expense that’s greater than the HOA’s budget, like fixing a structural building problem or the garage, the HOA will seek additional funding from its residents.
Resale Value of Condos and Townhomes
The resale value of both townhomes and condos can be limited by the amount of work you do to update the home.
Unlike a single-family home, you can’t make as many major additions to a condo or townhome, as the HOA will limit your ability to do that.
That’s why you’ll need to watch two other factors when you buy this kind of property: location and the upkeep by the HOA. If an HOA does a great job keeping up the property, it’s likely to leave a strong, positive impression on home shoppers, which will ultimately boost your value.
Location is also vitally important. You might have a beautiful home that is completely updated and a strong HOA that keeps up the property, but you could have problems maintaining or increasing your home value if the surrounding area is struggling or unsafe.
There are plenty of advantages to both condos and townhomes. Your lifestyle needs and budget will ultimately help determine which one is right for you.