Condominiums vs Townhouses

Many families have decided that they desire a home that may be outside the typical “American Dream” meaning instead of a single family home, some potential homeowners prefer condominiums or townhomes when choosing their future home. Often, these terms are used interchangeably but there is a distinct difference between a condo and a townhouse and knowing the difference can be helpful in choosing the type of home you wish to purchase.

What is a Condo?

If you purchase a condo, you are essentially purchasing the interior of a unit in a building while the hallways, common areas, building exterior and land around it are commonly shared by the community and cared for by another person or company, typically the homeowner’s association. Whether the building is an apartment-style or a home within a larger residential area, the idea is the same—you own the inside and the rest is someone else’s responsibility and property.

What is a Townhouse?

Purchasing a townhouse is similar to purchasing a single family home in the sense that they typically have some sort of yard and are usually multi-level. Purchasing a townhouse comes with the responsibility of caring for the interior, exterior and land the home sits on. Additionally, townhomes are usually grouped together and still attached to another building which often means there is still an HOA responsible of overseeing the entire community as a whole. An HOA can have guidelines that homeowners must follow, although you own your property.

Cost Difference Between Condos and Townhouses

When looking to be preapproved for a mortgage, you will receive advice about not purchasing more home than you can afford. When it comes to cost, you can sometimes afford a townhouse or condo over a traditional single family home for the simple fact that you are buying less square footage. So, a first-time buyer or someone who is concerned about their budget amount may find condos or townhouses to be a good choice. While a condo is typically less expensive because there is no land to invest in, they often come with higher HOA fees. A townhouse may have higher property taxes or a more expensive home inspection based on owning more of the residence.

Resale Values for Each

When it comes to reselling your condo or townhouse, the value will ultimately depend on how you cared for your residence. If you have a good HOA then the overall appearance of your community will be in good shape and help the resale value. However, you will want to be aware of how easy it is to get financing for your condo or townhouse and also keep in mind any updates you make will ultimately help your resale value in the end.

Which is the Better Choice?

Both terms are less about structure and more about which part of the building you own. Any type of building can be a condo or townhouse, depending on if you own just the interior of the unit or are responsible for the interior, exterior and land of your unit. Each option has positive and negatives and figuring out what is important to you in your purchase of a home will be the first part of your home buying process. No matter what your option is, we are happy to help you look into financing that fits you best.