Condo, Townhome, or House: Which One Is Right for You?

nkats, Mar 2, 2022

A person looking for houses on their laptop.

If you are searching for a new home, you are not alone. The number of house shoppers has increased even during the COVID-19 pandemic. In 2020, 6.5 million homes changed hands in the U.S. That figure rose to 7.1 million in 2021.

In other words, the housing market is extremely active. It may be easy to find a home for sale in your chosen area. However, is it the correct type of property for your needs and preferences?

If you plan to purchase a home, you have three options: condos, townhomes, and single-family houses. Each of these comes with different advantages and disadvantages related to maintenance, costs, equity, and size. Before buying a home, you should research the property types to determine which one best suits your present and future needs.

Here is a look at the factors you should consider.

Condominiums

A condominium is a privately owned unit within a residential building. Condo buildings can be located anywhere, but you will often find them situated in downtown neighborhoods. In terms of layout, condos are similar to apartments, except you own the unit instead of renting it.

In addition to your private condo, you also have access to public amenities inside the building. These can include a swimming pool, lobby area, and outdoor spaces.

Here are the advantages and disadvantages of living in a condo.

Pros

Condos offer certain advantages to homeowners.

  • Condos are often cheaper. Condos are often more affordable compared to stand-alone, single-family houses. They also come with lower insurance rates because you are only responsible for covering your housing unit and not the common spaces.
  • You can access luxury amenities and enjoy managed maintenance. Condos often include extra luxuries, such as swimming pools, fitness centers, and other amenities. These features are also usually professionally managed, so you can use them without worrying about maintenance costs.
  • You can become part of a close-knit community. Condos give you privacy while also allowing you to be part of a community along with other residents.
  • It is easy to travel. Condo buildings are secure and professionally maintained. Unlike a single-family home, you do not need to make complex arrangements for upkeep and security when you travel.

If you can take advantage of these positive attributes, a condo could be a good option for your next real estate purchase.

Cons

You should also consider the drawbacks of condo ownership.

  • You have to pay homeowners’ association (HOA) fees. While condos are relatively affordable and come with lower insurance fees, condo owners have to pay additional HOA fees to cover the cost of maintenance and insurance for common areas. These fees are sunk costs because they do not build equity in your condo. Also, if you do not use the common areas, they are not worthwhile expenses.
  • Some condos have reselling difficulties. Reselling a condo may sometimes be difficult compared to reselling a house. Buyers may shy away from condo buildings because of stringent HOA regulations or fees. Also, if the building is not well maintained, which is beyond your control, it could negatively affect the selling price.

Also, while condos may be ideal for individuals or small families, they are generally too small for larger families.

Townhomes

A townhouse, also called a row house, is individually owned but has at least one or two of its walls attached to the adjacent unit. Townhouses are rarely stand-alone structures. They are usually arranged in developments with similar homes. Like condos, townhouse developments rely on a homeowners association for management.

Townhouses offer a blend of condo-like convenience and single-family-home-like space and privacy. Townhouse developments are popular in many suburban and urban areas, such as the Northwest Hills area of Austin.

Pros

Here are the advantages you get when purchasing a townhome.

  • Townhomes typically cost less than single-family dwellings. Townhouses are generally cheaper than comparable detached homes in the same area. If you are looking for a lower cost per square foot, townhomes may be the better option.
  • Townhomes offer managed maintenance. Homeowners associations regulate townhouses, and the management is responsible for maintaining the common areas. They care for roads in the development, and many also cover lawn care and other outdoor maintenance.
  • Townhouses are larger than condos. In addition to the large living spaces, many townhomes have multi-story designs, so you get the upstairs and downstairs layout of a stand-alone home. Also, if you have pets and children, you will enjoy the outdoor spaces around the building.
  • Townhouse developments often have additional amenities. Depending on where you live, a townhouse may come with access to other amenities. For example, the neighborhood may have a community swimming pool, garden, or fitness center.

If you are looking for a balance of convenience and space, a townhouse could be a wise choice.

Cons

Townhomes solve some of the drawbacks of condos, but they also have their own set of disadvantages.

  • You may have to pay expensive HOA Fees. You still have to pay association fees to cover the cost of maintenance. These fees are typically assessed monthly, and they can add to the expense of your mortgage, taxes, and insurance costs.
  • Townhouses have less space and privacy. Because of the shared-wall design, it isn’t easy to maintain privacy. If you have noisy neighbors, you will hear them through the shared wall. Also, you will have outdoor space, but it is typically not separated from your neighbors, and most associations will not allow extra constructions, such as privacy fences.
  • You have responsibility for maintenance and repairs inside the townhome. In addition to interior plumbing, electrical, repair costs, you may need to cover maintenance for your garage and the exterior of your home.

If the advantages of condos and townhomes are not enough to overcome their drawbacks, you may want to consider a single-family home.

Single-Family Homes

A single-family house does not connect to other residential structures in any way. When you buy a single-family house, you own both the home and the land on which it sits. Single-family houses are commonly available in less densely populated suburbs, though some urban neighborhoods have single-family dwellings, as well.

Pros

Here are the advantages of purchasing a single-family home.

  • Detached homes provide space and privacy. Single-family homes do not share space with other buildings, and they have land in between themselves and the neighboring house. Furthermore, fenced yards are common in single-family properties, so you have more privacy both indoors and outdoors.
  • You have the freedom to make improvements and aesthetic choices. Because you own both the house and the surrounding land, you have the freedom to design and customize your property any way you desire, as long as the changes meet municipal zoning requirements.
  • You have ample outdoor space. A single-family house provides private outdoor space for pets, children, and outdoor activities, like barbecuing and picnics.

Cons

Single-family homes lack some of the conveniences of the other two options.

  • You may have increased maintenance costs. Since you do not have an association to maintain your property, you need to take care of all maintenance and associated costs yourself.
  • Single-family homes have higher price tags. Single-family houses are often the most expensive types of homes. In addition to the purchase price, you may have to pay higher property taxes and insurance premiums.
  • You do not have access to shared amenities. Single-family neighborhoods lack shared amenities. You may have access to public parks, but you will not get private pools or fitness centers offered to condo and townhouse residents.

Once you have weighed all the pros and cons of each type of housing, you need to employ a skilled real estate agent with local knowledge to find the best options in your area.

About the Author

Last updated: 03/08/2022

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