A condominium is more than just a fancy apartment. It is a private residence that you own in a building or community with multiple units. Most are usually part of a high-rise building, but there are also detached versions available in the United States for sale. They share common areas, like yards and garages, with other units so that no one maintains the property individually. That means your upkeep chores are much easier.
A townhouse refers to a dwelling that offers at least two floors. It will also share at least one common wall with another house. Instead of a four-plex or duplex, each townhouse is under individual ownership. The U.S. Census Bureau doesn’t distinguish between row houses and townhouses, so this combined housing market makes up about 6% of the total inventory. This option is usually available in areas where land availability is minimal and housing prices are high.
If you are thinking about purchasing a home for your family, then knowing the pros and cons of buying a condo vs. a townhouse can help you to make the correct decision.
List of the Pros of Buying a Condo vs. a Townhouse
1. You own the individual unit when purchasing a condo.
If you decide to purchase a condominium, then you can finally get out of the world of renting. You will personally own the unit you choose. Then you get to share joint ownership of the building and the land with the other owners – even if your agreement calls everyone a tenant. Part of the perks that come with this structure is that there are common areas that you help to jointly control.
That’s why you will often see a pool, a gymnasium, playgrounds, and other features on properties with multiple condos. This advantage lets you enjoy the aspects of a wealthy home by sharing the expenses with others.
2. Condos are typically cheaper than townhouses to own.
When you combine the HOA fees with your monthly mortgage obligation, the cost of a condo or a townhouse is going to be more affordable than the average single family home. Because of this issue, you should never purchase more than you know that you can manage. If you compare condominiums directly with townhomes, it is usually cheaper to purchase a condo since you’re not investing in any land.
It all depends on how many jointly-owned spaces that are in need of management with the condo’s HOA. There are a variety of factors that can shift this advantage as well, including property taxes, insurance rates, and home inspection costs.
3. You are going to be where all of the action is in town.
Condos go up in places where you have access to all of the amenities of an urban environment. You’ll likely be close to the bus line and other forms of public transportation. Grocery stores, markets, and restaurants are going to be at a walking distance from your home. Then you get to take advantage of the convenience and lifestyle benefits that come with this property option since condos have the fewest responsibilities attached to it. You can pay the HOA to take care of the common spaces and wipe your hands clean of the other chores that townhouses often require.
4. The major costs of ownership are shared in condo communities.
A portion of your condo fees goes into a reserve fund by law in most communities. That means a well-managed fund will cover the significant repairs that are necessary to the property without charging you anything for it. The best communities have enough funds to replace things like your roof or your windows without an unexpected expense. Even if that reserve falls short of the mark, special assessments help to limit the overall expense to each owner. Since there are more condo owners than townhouse ones in the average community, that means your share of the expense is going to be lower in almost every situation.
5. There are more amenities to enjoy with a condo.
Some condo communities offer several benefits that you won’t get to enjoy when living in a townhouse. Each one is different, but some of the perks might include a theater room, a party area, or a complete fitness center. These common areas are yours to use according to the rules of your HOA at any time. It’s a great place to make new friends with your neighbors. Most communities form around a specific demographic too, such as families with young children, Baby Boomers, or young professionals.
6. You receive better security with a condo than a townhouse.
If you own a townhouse, then it is generally your responsibility to provide security for your property. That’s what happens when you own the land. When you decide to purchase a condo instead, then the community typically chips in to provide a complete security presence. If you live in a high-rise building, then door personnel, key cards, and other measures can prevent unauthorized access to your property.
If you were in a townhouse, then you’d want to call someone like ADT to make sure that you had emergency options available. Condos make it easier to live alone since you’re in close proximity to other people and have immediate emergency options to get help when needed.
7. There is less maintenance to worry about with a condo.
One of the most popular benefits of condo ownership is that other people are doing the maintenance work for you. That means you get to skip cutting the grass or maintaining the grounds. Other people shovel the snow for you, put salt down on icy sidewalks, and take care of the exterior problems. That’s why individuals in poor health or have busy work schedules prefer this lifestyle. You can travel a lot without worrying about whether someone is tending to the garden outside of your window correctly.
This benefit also makes it possible to age in place well because you have close neighbors. There is experienced maintenance staff that can take care of the big repairs, and there are lots of activities for you to enjoy as you engage with the community.
8. Some condos are experiencing a surge in appreciation value.
One of the primary disadvantages of condo ownership in the past was that the properties would appreciate slower than other options. Townhouses and single family homes are usually more appealing to the average person, especially since there is land with those options and not with a condo.
This issue is turning from a disadvantage to an advantage in some communities. The Washington Post reports that the market value for condos in the United States rose by almost 40% between 2012-2017, but the value of single family residences only climbed by about 28%.
9. You can usually find newer condos that are cheaper to own.
When you want to purchase a home on a budget, you’ll need to look for older properties when considering a townhouse. Condos go in the opposite direction. The HOA fees in older communities is usually higher because they need more upkeep than newer buildings. The U.S. Census reports that buildings constructed before 2005 were charging $90 per month less than the ones that were built in the 1960s. If you’re ready to enjoy a maintenance-free lifestyle with some affordable luxury options, then smart choices can lead you to some incredible deals.
10. You can limit HOA expenses by choosing properties with limited common elements.
If you don’t want to pay significant HOA fees for your property, then a condo with limited common elements will reduce your monthly obligation. Choose a place that doesn’t have a tennis court, pool, recreation center, or fountains. If you stick to the basics, like parking lot and sidewalk maintenance, then you have an expense profile that is more predictable.
List of the Cons of Buying a Condo vs. a Townhouse
1. Townhouse ownership is closer to that of a single-family home.
When you decide to purchase a townhouse over a condo, then you personally own the structure. You’ll also own the land that it sits on. The only difference between it and a house is that you’ll be sharing walls with other structures with your home. It’s more than a difference in architecture here. The difference is that you own the land without joint ownership of the rest of the building, property, or assets.
That means you have the opportunity to own a yard with a townhouse. Any open space that you have with a condo comes under the shared ownership agreement in most situations. If you want a lot of outdoor space, a detached garage, or a large yard for your dog to roam, then neither option will have what you need.
2. Both options require you to pay HOA fees.
Whether you decide to purchase a condo or a townhouse, there is going to be a homeowner’s association fee tacked onto the monthly mortgage you pay. These organizations are run by the other tenants. It is the way that the grounds and common spaces receive the care that they need. Townhouse communities use the funds to care for some of the exterior structures. You have the option to join the HOA board once you move into the community, which is beneficial since it is responsible for setting the rules of use.
The HOA fees with a townhouse are usually less than what they are for a condo. You’ll experience fewer benefits as well since there aren’t usually joint ownership opportunities. It all depends on what you hope to get out of the property.
3. Townhouses usually have a better resale value.
The reason why you can typically get more money and appreciation out of a townhouse is because of the land that it sits on. Even though you’re sharing a common wall on at least one side, you don’t need to deal with joint-ownership issues with multiple households. That means you have more value to offer to a potential buyer. If you are looking for an investment or want a better resale price when it is time to move in the future, then you’ll want to consider this option first.
4. Townhouse fees are usually consistent over time.
If you own a condo, then you might pay anywhere between $200 to $600 per month for the convenience of the common ownership items that you share. Those costs never go away, even if you pay off your mortgage or purchase the property outright. You’ll still have HOA expenses with a townhouse too, but those costs are typically more consistent. Most condo fees never go down once they go up either.
When your fees have tripled, then it is a challenge to find buyers willing to take on a mortgage and a higher monthly rate. That means sellers are often forced to provide a discounted price to find a buyer when it is time to move. Townhouses can see this issue too, but it happens with less frequency.
5. You won’t experience special assessments with townhouses.
When your condo board goes over their budget, then all of the costs get passed down to the ownership group. If you’re not part of that decision-making process, then you have no say in what the money gets spent on. Your condo fees might include water, but if the entire neighborhood goes over the amount budgeted by $10,000, then you’ll pay the fractional share based on your agreement. If some owners use more common elements than others, then everyone pays for the consequences. That doesn’t happen with townhouses unless they are part of a condo neighborhood.
Condos also require the owners to pay up for whatever the reserve fund is unable to cover. Members of the boar can show up at your door whenever this issue occurs and tell you that you’re on the hook for several thousand dollars. Since it is legal, there’s nothing you can do about it.
6. You’re not part of a common group of owners for litigation purposes.
Townhouses might share a common wall with someone else, but they generally don’t create a common ownership group because you have possession over the land on which the property sits. When you own a condo, then sharing costs can become a problem. If someone damages a common area for any reason, then everyone is on the hook to pay for the repair. Should your association be involved in a lawsuit, even if you’re going after the developer because they messed up on the building, then you’re paying the legal fees of that action.
Condos put you into joint ownership contracts with people you don’t know and didn’t choose if you decide to make a purchase. There will be continuous changes to that group throughout the entire time you own the property. If you want more consistency and control, then your best option is a townhouse in this comparison.
7. A townhouse gives you more control outside of your unit.
When you decide to purchase a townhouse, then you have some choices available to you when deciding what the exterior of your home looks like over time. You typically don’t have the privilege when dealing with a condo association. Condos won’t even give you choices about the decisions on redecorating a lobby or changing the paint color on everyone’s front door sometimes. It’s always up to someone else to get the work done, even if you have a critical repair needed like replacing a window.
Both options give you full control over what happens inside of your unit in good and bad ways. If you want any hope of managing a small yard or the color of your siding, your only choice is to pursue a townhouse.
8. You’ll receive more privacy with a townhouse.
You might have one neighbor if you have a townhouse since the definition is a single common wall. Even if you live in row housing, the amount of space needed for these residences limits the number of people trying to spy through your windows. If you choose a condo, then life is more like living in an apartment. Even with excellent soundproofing, you’re going to hear people above or below you. If you’re on a middle floor, then that means you might hear both.
Townhouses are a better choice for peace and quiet. It’s not a guarantee, but at least there are fewer problems with hearing the newborn crying at 3 am every night with this option.
9. There are more pet ownership options in townhouses.
Condos are a difficult property to sell for a variety of reasons. Their size is problematic for families with more than one child. If you own multiple dogs, then you need at least a small yard. That means you’ve got limited buyers from which to choose immediately. Living in a townhouse will give you more space in most situations. You have more pet ownership options to consider too, especially if there is a small backyard to enjoy. The HOA might have some limits (and so do some communities) that you must follow, but you generally have more freedoms to enjoy with this option when compared to condos.
10. You have more ways to take out a mortgage with a townhouse.
The financial health of a condo HOA is a determining factor for lenders when taking out a mortgage. Most of them will not approve a loan for you if there’s pending litigation of any type against the association. The financial institution will also look into the financial situation to see if there are reserves in place. Sometimes a high ratio of renters will cause loan denial. All of these issues make life a lot easier to manage if you were to pursue a townhouse instead.
11. There are more rules you’ll need to follow in a condo compared to a townhouse.
When you decide to live in a condo, then you must live by the rules of the manager. If you want to install solar panels to conserve the amount of energy you use at home, then you must receive their permission to do so before you can get to work. The list of guidelines that you need to follow can be overwhelming. They can limit the number of visitors you have, set restrictive quiet times, and even choose what pets or dog breeds are permissible. If you don’t follow the rules, then you get a fine. Not paying the fine can result in a lien that might ultimately put you into foreclosure.
There are HOA rules that you’ll need to follow in a townhouse too. The list just isn’t as extensive as it would be in a condo. Some people have no problem with this issue, but others can find it to be quite stifling.
The pros and cons of buying a condo vs. a townhouse rely on an answer that only you can provide. This debate comes down to a measurement of the differences between the two properties. You must determine which one is the best overall fit for your family, future plans, and overall budget.
There is not a definitive answer to offer when looking at whether one is better than the other. Both properties provide a specific set of advantages and disadvantages that are worth considering. There are considerable similarities between the properties as well.
When you find a property to purchase, then it is essential to dig into the details of the previous ownership. Look at the fees and taxes that you’ll pay so that you can calculate a final cost. Once you can reach a reliable figure for this purchase, then you’ll be in a position where you can make the best decision possible.
About the Author of this Article
Natalie Regoli is a seasoned writer, who is also our editor-in-chief. Vittana's goal is to publish high quality content on some of the biggest issues that our world faces. If you would like to contact Natalie, then go here to send her a message.