Condo vs. Townhouse: How Are They Different

How Are Townhouses Different From Condos?

One of the big choices you have to make when home buying is what type of property you want to live in. An increasingly popular choice for buyers is between condos and townhouses. They offer many advantages to buyers with benefits over traditional family homes.

These types of property have many things in common, but important differences as well. Let's take a look at the main differences between condos and townhouses.

Condo vs. Townhouse

A condo or a condominium is very similar to an apartment, with the big difference being that it isn't rented. The resident owns the condo instead of a landlord.

Condos are separate units that are normally very similar and contained in a larger building managed by a homeowners’ association.

Townhouses are homes over multiple floors that share walls with their neighbors normally on both sides. The resident owns the whole house, inside and out, as well as the outside space. An HOA also manages common areas of the development and amenities.

The Costs Involved

You shouldn’t only consider the purchase price of any home; there will always be other ongoing expenses of ownership. These can differ depending on the type of home you buy, which is true of condos and townhouses.

There are even differences between condos and townhouses when it comes to mortgage expenses. Typically, you can expect to pay more interest if you are purchasing a condo than a townhouse.

HOA Fees

Owners of both townhouses and condos will have to pay homeowners association fees. These costs contribute to the maintenance of the communal areas and the shared amenities.

You will have to pay fees every month to the HOA. Other residents of the development operate the association, and you can participate in this if you wish. One of the most vital questions when buying townhouse or a condo is finding out how the association is managed and stable financially.

When you own a condo, the fees will cover the building's maintenance and the common areas inside and out. When you own a townhouse, the fees have less to cover as the building repairs will typically, but not always, be the responsibility of the individual owners.

Whichever type of home you own, the costs can vary a great deal depending on many factors. The location of the development, the amenities provided, and the condo buildings' age are just some of the factors that can decide your monthly fees.

Generally, HOA fees are going to be more for condos than townhouses. This is thanks to more communal areas to maintain, but it will depend on the development facilities.

You can expect higher HOA fees if you will have access to things like swimming pools and gyms. If many security facilities and people are working at the front desk, the residents have to pay for this.

Townhouses frequently don’t have some of these facilities and so have less to pay each month. You should make sure you find out the costs for either the condo or townhouse you are interested in before you make an offer.

Paying Your Taxes

There are going to be property taxes due for both condos and townhouses. These are normally decided by the value of the home and the tax rate in the area.

Since condos are likely to cost less, they will also pay less in taxes. Condos also have less square footage and no outside space.

Either way, your taxes will be added to your mortgage payments so that you pay the tax gradually over the year. This money will be placed in a separate account and paid to the government when it is due.

Whether you are buying a condo or townhouse paying your taxes on time will remain an essential task. Those who don't could find themselves in foreclosure.

Homeowners Insurance

When you own a condo, part of your HOA fees will pay for the building insurance. Your homeowner’s insurance will only cover the interior of the condo. So typically, it is going to be cheaper than insurance for a townhouse.

Townhouse insurance normally has to cover the home's interior, the outside, and the land that the property has.

Homeowner’s insurance is usually required by lenders when you get a mortgage. It will cover costs should the home suffer damage from extreme weather, fire and pay to replace items stolen. It should also include liability coverage should someone be injured within your home.

Resale Values

Generally speaking, if the home is within a well run HOA, this will add to the resale value when you come to sell. Impressive and well-maintained facilities will add value and make the home easier to sell.

Condo vs. Townhouse - Advantages and Disadvantages

Aside from the obvious differences, like a townhouse offering more rooms and space over a condo, there are other things you have to consider before you choose.

Community Living

If you live in a condo, you are going to interact with the neighbors more often. You will see them in your building when entering and leaving and when you use the communal areas. It is much like living in an apartment.

While you might like this, there can be downsides to living close to other people. If you have noisy neighbors, your home life can be unpleasant.

Your Privacy

Living in a townhouse will provide you with more privacy over a condo. You are unlikely to bump into neighbors every time you leave the townhouse, which won’t be the case with a condo. If you are concerned about people knowing your business, a condo might not be a great option.

Homeowners Association Rules

While there will be rules for both types of homes, this can be a bigger issue with a townhouse. There will likely be rules for what you can change and the maintenance you will be expected to complete. There could be restrictions on the color the front door has to be painted and what you can plant in the front yard.

There won’t normally be restrictions on what happens inside your home, however. The rules are designed to increase the value in the neighborhood but can sometimes seem extreme.

Dealing With The HOA

Living in a condo, you are likely to be more reliant on the HOA. This can be a problem if the HOA isn’t well run. You should try to find out if residents are happy with the HOA before you decide to buy.

Whether you choose a condo or a townhouse, the decision should be based on what is right for your family. There are positives and negatives to both, and what is right for one buyer isn’t going to be good for someone else.

Final Thoughts on Condos vs. Townhouses

While condos and townhomes are similar, there are some differences, as we have discussed, worth knowing. When trying to decide between the two, it is essential to know each of their pros and cons. Maybe the differences are so subtle you don't even care? For many folks, that is the case. Just be sure you are one of them before committing either way.