When searching for a new home, prospective buyers are usually faced with three distinct options: townhomes, condominiums, and detached homes. Most people are familiar with the latter, but less clear on the main differences between townhomes and condominiums. Let’s look at each to shed some light and hopefully help you to decide which is right for you.
What are the main distinctions between townhomes and condos?
Let’s start with the similarities: both types of real estate are most often connected to at least one other home; both are usually overseen by a homeowner’s association (HOA) that handles community matters such as trash removal and similar services.
These are some key differences:
- With a townhome, you usually own the land on which the property sits. So everything on the exterior, from a front area to a backyard, is yours alone to enjoy and to maintain. With a condominium, only the interior of the property is owned; the inside of the unit is the owner’s responsibility to maintain, while the exterior responsibilities, such as building facades and maintaining common areas, fall to a homeowner’s association.
- HOA fees. With townhomes, more of the exterior maintenance falls on the owner, so the fees paid to a homeowner’s association are usually lower. HOA fees for condos are generally higher. How high? That depends. HOA fees can be as low as $200 a month and go up to thousands monthly for more exclusive condo residences.
- While not true in all cases, condos usually have stricter rules. Homeowner’s associations commonly restrict owners from doing landscaping that doesn’t align with their neighbors — the same with exterior painting and other high-profile changes that break with an established uniformity. The rules regulating townhomes are often looser, but a HOA’s regulations on things like noise levels, trash removal, and more could still be considerable for a townhome. So, it is highly important that you’re clear on the HOA rules before you buy either a townhome or a condo.
Shared amenities. With townhomes, you generally don’t have much in the way of amenities that all residents share; the common areas we often see with condominiums, such as pools, club rooms, fitness centers, and playgrounds, are rarely present with townhomes. But what townhomes lack in common spaces, they usually make up for with private areas and thus greater overall privacy.
Consider your lifestyle
How you live your life may factor considerably in choosing between a townhome and a condo.
Life in a townhome leans more toward a single-family home experience. Townhomes are usually larger than condos, often with multiple floors, and so perhaps better suited for family life with children. Or for homeowners who wants extra space for a home office, or perhaps prefer to have their living areas and their bedrooms separated by floors. If outdoor space is a must, you may wish to choose a townhome rather than a condo.
Condo life often mirrors that of apartment living. And like apartments, condos are commonly found in more metropolitan areas, often near downtown centers with a concentration of shopping, restaurants, and more that city life offers. With condos, as with apartments in high-rise buildings, you could be connected to four neighbors: above, below, left, and right. Your living space will probably be more compact in a condo compared to a townhome.
Consider the costs
Beyond differing HOA fees, there are some financial considerations to take into account when choosing between a townhome and a condo. Both options are usually more affordable than buying a detached home, but townhomes often come with higher price tags and higher property taxes than condominiums.
Your monthly mortgage payments may differ between a condo and a townhome — even if they have comparable purchase prices; a mortgage for a townhome may come with a lower interest rate than one for a condo. You’ll want to be clear on the home insurance you’ll be paying: condo insurance could be cheaper because it only covers a property’s interior, while townhomes may have exterior areas that need to be insured.
Then there’s resale value to think about. Upgrades and renovations often affect this. If you own a townhome with fewer restrictions on the improvements you are allowed to make, home upgrades could significantly increase the value of your home. But a diligent HOA could do the same for a condominium. If the homeowner’s association of your condo is active in maintenance and upkeep, that’ll make your condo all the more attractive to a buyer when it’s time to sell.
Townhomes and condos each have pros and cons that need to be weighed against each other. Overall, both your budget and your lifestyle are the two main things to consider when choosing between the two. Plus, your vision for the future. How do you see yourself living your life after you get the keys to your new dream home?
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