What is the difference between a townhouse and a condo?
Evaluate your capital objectively and decide exactly what amount you can spend. And of course, you should decide on the characteristics of housing. How not to make a mistake and choose the right and the best variant? We are here for you to help. Today we are going to explain the difference between a townhouse and a condo.
Condo vs Townhouse
A townhouse is a type of building a condo is a type of ownership. A condo is usually a flat but in any case only gives the buyer ownership of the space inside the walls, while the land underneath is not owned by the individual unit owner. A condo is a fee simple ownership in real estate. The buyer/owner receives a deed in a formal title transfer. A condo usually has a home owner’s association (HOA) or a board of directors. Condo unit owners usually share common space such as hallways and outdoor space and common amenities. Monthly payments to the condominium are called common charges or association dues.
A townhouse can be a single family home, multi-family or mixed use building. It can be up to six floors. It’s ownership type can be a rental property, a condo or coop. A townhouse conveys the structure (which is attached in typically a side-to-side manner to other units) as well as the land underneath. Typically, condos have neighboring units attached to the sides as well as above and/or below, while town homes only have neighbors attached to the sides. There are some exceptions but the legal principal of unit only, versus land and unit, apply.
What are the advantages of buying a townhouse?
This is going to be highly dependent on what you value in a home. We have interviewed one of our client Lara Fisher as a personal example of “why I own a townhouse”.
Lara Fisher, 38, MyREproperty happy client:
“For me, the deciding factor was low maintenance. Sometimes I think that I would love a two acre property out in the country, but then I tell myself, who am I kidding? After I’ve been at work all day, the last thing I want to do is come home and spend 3 hours mowing the grass and weed trimming. My lawn maintenance takes about 1 hour per week in season.
The biggest trade-off for me is privacy. When I step out into my small back yard, I am in a fishbowl, surrounded by 14 other townhouses who all have windows into my back yard. I thought about remedying this by adding a fence, but there is such a sharp decline in the yard, the fence doesn’t really hide anything. My neighbor put one up and we can still see them.”
She decided to buy a townhouse over a regular house because:
- She didn’t want the hassle of doing lawn maintenance on a large lot.
- In general, a townhome is easier and less costly to maintain than a standalone home, especially if you live in a middle unit, because exterior space is more limited compared to a stand alone home.
- It costs less to heat and cool because you are attached at least on one side.
- In her local market, new townhomes with a larger square footage were the same price as smaller and older ranch-style homes, so the townhouse was the better value.
- Her development was in a great location - in city limits, close to shopping, and right off of an on/off ramp to the highway.
- A townhome usually means belonging to an HOA (Home Owner’s Association). Some might see this as a con, but often times, your fees go to maintaining common areas such as lawn maintenance and snow removal, which means one less thing you have to worry about.
Now for the reasons why a townhouse might not be a good fit for you:
- If you value privacy, a townhouse is not for you. You will be up close and personal with your neighbors often, as you will likely share either a driveway or a front door that is in close proximity. And you will always have someone to say hello.
- Townhouses tend to be on smaller lots compared to stand alone homes, so if you want a big yard, you’re probably out of luck.
- The neighborhood is going to feel busy, with lots of cars parked along the street and neighbors always coming and going, so if you want a less busy neighborhood, it may not be for you.
Benefits of buying a condominium
Condos are appealing to people who want to live in a community setting. Grilling areas, gyms, pools, and other common amenities can be found in many condo developments. These appealing features may make it easier to obtain renters for a condo or Airbnb visitors. Whether you buy, rent it out or use it for Airbnb, a condo can provide income. While you are getting this income, the condo's value rises over time, boosting your equity. All wise investors are now inclined to the real estate field.
We have feathered the ideas for you to consider about condos:
- Higher likelihood of consistent neighborhood appearance over decades and ownership turnover.
- Less burden from large home maintenance issues like roof replacement, electrical panel issues, HVAC repairs, etc.
- Usually these communities are gated which provides a higher sense of security.
- HOA dues that may increase over time. Even after your mortgage is paid off, you will still have a monthly bill. This does provide conveniences though of exterior maintenance, and often a pool, spa, and fitness center.
- HOA regulations or management that you may not agree with.
- Less space between you and neighbors - pro or con depending on who you talk to.
- Condos (as opposed to PUDs, cluster homes and other high density residential housing) may have greater restrictions on financing depending on the financial health of the HOA and foreclosure activity in the community. This can be limiting when you want to sell your condo.
- Little private exterior space.
- Overall cost of ownership tends to be significantly less in higher density housing because there is an economy of scale to this community living style.
Regardless of whether you choose real estate for yourself or as an investor, emotions can prevent you from making an mature choice. Therefore, it is worth adhering to a rational approach — to assess the prospects for the development of the district, the convenience of the location of the property, the relevance of its architecture and design, the quality of construction, the efficiency of planning and much more. At the same time, a certain weight is assigned to each group of indicators, and then a weighted score is calculated, which reflects the objective picture. This approach is offered by professional real estate consultants. Having clearly identified the desired goal for yourself and correctly planned your actions, you will definitely achieve the desired result. And it doesn’t matter whether it is going to be a townhouse or a condo, the main thing is that you are happy with your decision.
June 28, 2022How to Buy a Condo in FloridaLearn how to buy a condo in Florida with MyReProperty. Find crucial tips for buying a condominium in Florida and learn how to invest your money wisely to best offers of real estate property.
October 26, 2022Realtor vs Real Estate Agent
November 29, 2022Is It Cheaper to Build a House - Build VS Buy