By Tim MaxwellCondo vs. Townhouse: What’s the Difference?
If you're looking to purchase a new home, you'll need to decide what type of property you want to buy. While single-family homes are still the most common homebuyer choice, demand for condos and townhouses is rising. If you're looking for something more affordable and potentially lower maintenance, these units may be worth exploring.
While condos and townhouses (also called townhomes) might seem similar at first glance, they're not the same. The key differences between condos and townhouses come down to ownership, structure and maintenance responsibilities, among other factors.
Here's what you need to know about how condos and townhouses compare.
| Condo | Townhouse | |
|---|---|---|
| Ownership | Own interior only | Own entire unit, exterior and land |
| Structure | Unit within multiunit building or complex of buildings | Multilevel home with at least one common wall and may include yard or patio |
| Maintenance | Owner is responsible for interior; HOA handles exterior and shared areas | Owner is responsible for both interior and exterior |
| Amenities | More shared amenities like a pool or gym are common | Fewer community amenities available |
| Cost | Typically cheaper than townhouses | More expensive than condos, but typically less than single-family home |
| Fees | Higher HOA fees | Lower HOA fees |
What Is a Condo?
Condominiums, commonly known as condos, are typically single-story units within a large, multiunit building. The building itself could be a high-rise structure, or a complex of multiunit buildings. With a condo, you own the interior of your unit, and your homeowners association (HOA) or community board is responsible for maintaining the exterior and property grounds.
Condo owners often share parking lots or garages and other outdoor spaces. In some condo communities, you may enjoy amenities like a gym, pool and clubhouse.
Learn more: Should Your First House Be a Condo?
Pros and Cons of Condos
Condos can be an affordable and convenient homeownership option, but you need to weigh the benefits and downsides to make sure it's the right choice for you.
Pros
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Less upkeep: You're only responsible for maintaining the inside of your unit, while the condo association usually handles exterior maintenance, landscaping and shared spaces.
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Access to shared amenities: Many condos come with perks like a pool, gym and private security. Funding for these features should be included in your HOA fees.
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Typically lower purchase price: Condos usually cost less than townhouses and single-family homes. Remember, you're not buying the land or exterior, which helps keep the price down.
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Lower property insurance: Similarly, your homeowners insurance premiums are usually lower than what you'd pay for a full home policy, since you're only insuring the interior of your home.
Cons
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Less privacy: Depending on your building and floor, you may share walls with neighbors above, below and beside you. That close proximity could expose you to more noise than you'd typically hear in a townhouse or detached home.
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Higher HOA fees: While access to amenities is a nice perk, ultimately you're paying for the maintenance and services. HOA fees can be steep, with the average homeowner paying $291 per month, according to DoorLoop.
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Slower appreciation rate: Condos usually appreciate slower than single-family homes, which could affect your listing price if you decide to sell.
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Limited control: Townhouse and single-family home owners generally have greater liberty to repair or make improvements to their home's exterior. In a condo community, however, the board makes those decisions and you may not always agree with them.
Learn more: What Is Condo Insurance?
What Is a Townhouse?
A townhouse is often referred to as a rowhouse because it shares at least one wall with a neighboring unit. Unlike a condo, in which you only own the unit's interior, you also own the home's exterior and the land beneath it.
Aside from the common wall, living in a townhouse is similar to living in a home. These homes are usually built with more square footage than a condo and often include an attached garage and a small yard, which you're responsible for maintaining.
Pros and Cons of Townhouses
Explore the perks and risks of owning a townhouse to help determine if buying one makes sense.
Pros
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Full property rights: You typically own both the inside and outside of your townhouse, plus its property. That gives you more control over repairs and any changes you want to make.
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More space: Townhouses are usually multilevel and offer more square footage than condos. While the average condo is around 1,200 square feet, townhouses typically range from 1,300 to 1,500 square feet but can be even larger.
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More privacy: Townhouses are typically two-story structures, so it's unlikely you'd have a neighbor above or below you as you might in a condo. You may also enjoy features found in a traditional house, like a patio, yard and garage.
Cons
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More maintenance: Since you own the exterior, you're responsible for outside repairs and maintenance, such as mowing the lawn and repairing your roof.
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HOA fees and rules: Townhouses are often in communities with HOAs, so you'll incur fees for services and amenities and must follow community rules. There may also be restrictions on modifications you can make to your townhouse's exterior.
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Limited space: Townhouses are generally bigger than condos but smaller than detached homes. If you need a large yard or a larger home, a townhouse might not work for you.
Tip: Even though you own the land with a townhouse, HOA rules may still restrict how you landscape your yard and what color you paint your house. Review the covenants, conditions and restrictions (CC&Rs) before you buy.
Should You Get a Condo or a Townhouse?
Condos and townhouses offer a more affordable option than purchasing a single-family home. But which one is right for you?
When to Get a Condo
Depending on your situation, you may prefer to purchase a condo when:
- You prefer minimal maintenance. If you don't have the time or inclination to perform exterior repairs and maintenance, a condo might be a better fit. You must take care of your unit's interior, but you can leave the landscaping and exterior maintenance and common area work to the community association.
- You're buying in a high-density urban area. If you need a home in the city where space is limited, you may find more condos available than townhouses.
- You want to pay less. Condos typically cost less than townhouses and single-family homes because they're smaller and you aren't buying the land or exterior.
- You like shared amenities and a close-knit feel. Condos may offer perks like pools, theaters and clubhouses. If you enjoy doing things with your neighbors, you might like condo life.
When to Get a Townhouse
On the other hand, a townhouse may be a better fit for you if:
- You want more space and privacy. If having two stories, a small yard and a garage appeals to you, you may find plenty of townhouses that fit the bill. While these homes do have at least one shared wall, they typically have fewer common walls than condos.
- You want more control over the property. Since you own both the unit and the property it's on, you can make exterior repairs and upgrades. That means you don't have to wait on the HOA for maintenance or ask for their approval to make changes outside your home.
- You want a quiet home. With a condo, especially those in high-rise buildings, you may share hallways and elevators with neighbors. But a townhouse offers more residential-style living, with your own front door and, in many cases, an attached garage, among other features.
- You want lower HOA fees. Townhouses are sometimes part of an HOA, but the fees are often lower than what you'd pay in a condo community, especially if there are fewer amenities and you're handling more of the maintenance yourself.
Shape Up Your Credit Before Buying a Condo or Townhouse
Whether you're interested in a condo, townhouse or single-family home, you'll need to prepare financially if you plan on financing your home purchase. You'll want a good credit score and a lower debt-to-income ratio (DTI), which are two of the most important factors lenders use to decide whether to approve your mortgage and what terms you'll get.
It's a good idea to check your credit report and FICO® ScoreΘ for free with Experian. Take steps to dispute any issues you find on your credit report and pay down any high balances before applying. When you're confident of your approval odds, get preapproved for a mortgage. You'll have a better idea of what you can afford and you'll be ready to act fast when you find the right home.
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About the author
Tim Maxwell
Tim Maxwell is a former television news journalist turned personal finance writer and credit card expert with over two decades of media experience. His work has been published in Bankrate, Fox Business, Washington Post, USA Today, The Balance, MarketWatch and others. He is also the founder of the personal finance website Incomist.
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