If you want to own your own home, but the idea of having a detached house doesn’t appeal to you, you might be thinking about buying a condo or a townhouse. It’s important to understand the distinction because it will affect your costs and responsibilities.
What Is a Condo?
A condominium is a single-level home that’s part of a larger complex. A condo complex is similar to an apartment building and is often located in an urban area. Condo owners can enjoy a range of amenities, such as a pool, gym, tennis courts and movie theater.
If you buy a condo, you will only own your individual unit. A separate entity will own the common areas and the land that the complex sits on.
You will be required to pay homeowners association dues to cover routine maintenance and repairs for the building’s exterior and common areas, plus other services, such as snow removal and trash pickup. You’ll have to abide by a set of rules called covenants, conditions and restrictions. They can limit your options when it comes to renovating and other activities.
What Is a Townhouse?
Townhouses are typically multi-level homes that are constructed in rows and that share adjoining walls. Townhouses have more square footage than condos and sometimes have separate garages. They’re generally located farther from busy urban areas.
If you buy a townhouse, you’ll own your home, as well as a front and/or back yard. You will be responsible for maintenance and repairs for both the inside and outside of your property. Townhouse communities typically have fewer amenities than condo complexes, but owners of townhouses generally have more privacy than those who live in condos.
A townhouse can also belong to a homeowners association. The HOA won’t have the same maintenance responsibilities as an HOA in a condo complex, but it will set and enforce rules for the community. An HOA can also provide services such as trash collection and snow removal.
How Do Costs Compare?
A condo costs less upfront than a townhouse because the purchase of a condo doesn’t include land. Property taxes and insurance generally cost less for a condo because it only includes an individual unit, not the land beneath it. On the other hand, HOA fees for a condo are typically higher because the HOA in a condo complex provides more services than one in a community of townhouses.
Which Is Right for You?
If you’re not sure whether you should buy a condo or a townhouse, consider the upfront and ongoing costs of each and the type of lifestyle you’re seeking. Think about how much space and privacy you want, whether you would prefer a home on one or more levels, whether having a yard is important to you, how much time you’re willing to spend on maintenance, and whether you would prefer to live in a busy urban area or a place that’s farther from all the hustle and bustle.
