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Is It Best To Buy a House, Condo, or Townhouse?

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A couple stands on a condo balcony.

When you’re looking to buy a home, you need to consider the size, the location, and, of course, the price. But one of the biggest factors will be the type of home you want. Exploring the differences between home types can help you find the right fit.

Whether it’s a single-family home, a condominium, or a townhouse, each home type comes with ups and downs. Your financial situation and lifestyle will narrow down the choice you make.

If you’re feeling unsure about this decision, don’t worry. Here’s a rundown of the major differences between condos, townhouses, and single-family homes:

Should You Buy a House, a Condo, or a Townhouse?

The differences between condos, townhouses, and single-family homes can have a big impact on your lifestyle, as well as the amount of freedom and space you have — both inside and outside of the home.

A condo is like an apartment in that it’s one unit within a larger building or residential complex, except you get to own it.

A single-family home is a stand-alone house with outdoor property surrounding it.

You can think of a townhouse as a combination of the two. Like single-family homes, townhouses are often multileveled and have outdoor space. You own the interior and exterior of the home, as well as the yard space, and are responsible for maintaining all of it. But like condos, townhouses share walls with other homes, though townhouses are usually part of a row.

The type of home you choose influences how much you pay and the work you must put into taking care of your space. On top of this, you may need to pay dues to a homeowners association that maintains and manages the community where your home is located.

Below is a snapshot of how homeownership costs can vary based on home type:

Cost Differences Between a Condo vs. Townhouse vs. House

Home TypeCostsWhat You OwnWork Required
Condo– Down payment and closing costs
– Monthly mortgage payment
– Property taxes
– Condo insurance
– HOA fees
– Some utility bills
The interior of your unitMaintaining the interior of your unit
Townhouse– Down payment and closing costs
– Monthly mortgage payment
– Property taxes
– Townhouse insurance
– HOA fees, if applicable
– Some or all utility bills
Your unit and the property it sits onMaintaining the interior and exterior of your unit, as well as any private outdoor space
Single-Family Home– Down payment and closing costs
– Monthly mortgage payment
– Property taxes
– Homeowners insurance
– HOA fees, if applicable
– Some or all utility bills
Your home and the surrounding propertyMaintaining the interior and exterior of your home, as well as your yard space

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Condos

If you want to live in a place with neighbors close by, lower maintenance costs, and amenities, then a condo might be the right move for you. That said, condos often offer less square footage and limited control over your unit.

What is a condo?

A condominium, or condo for short, is a unit in a building or residential complex with common areas and shared amenities, such as gyms, pools, event spaces, and security. It’s like an apartment where you own the unit instead of renting. With condos, the opportunity to get to know neighbors in the common areas can lead to a more social lifestyle.

So, how do condos work? You get to enjoy the amenities without having to worry about maintenance or repairs for the exterior of your home and the common areas. Instead, you pay a regular fee to a homeowners association that maintains the community.

How much does a condo cost?

Condos are often cheaper than townhouses and single-family homes because you only own what’s within the walls of your unit. As a result, you also pay less in insurance and property taxes. However, homeowners association fees will likely be high because they cover the cost of various amenities and more upkeep.

The price of a condo depends on the property and the area, but below are some of the costs you can expect to encounter.

Upfront costs

Ongoing costs

  • Monthly mortgage payment
  • Property taxes
  • Homeowners insurance
  • HOA fees
  • Some utility bills
  • Interior maintenance

Is a condo right for you?

If you’re trying to decide between a condo vs. a house, one important factor could be location. Condos are common in urban areas and typically close to many restaurants and stores in the city. However, keep in mind that you can’t control what happens to the building as a whole, so your condo can be damaged by instances of fire, flooding, or negligence through no fault of your own.

Learn more about some of the benefits and drawbacks to condo ownership below.

Pros of buying a condo

  • Amenities and common areas
  • Lower costs compared with a townhouse or single-family home
  • Less responsibility in terms of maintenance and repairs
  • Central location with more social opportunities

Cons of buying a condo

  • Less square footage
  • Higher HOA fees  
  • Lack of control over the exterior of the unit
  • Reliance on others to keep the community safe and maintained

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Townhouses

If you want to live in a close-knit community but still have outdoor space, then a townhouse could be the right middle ground for you. Just keep in mind that any yard space will be limited, and you’ll have less privacy due to shared walls with other homeowners.

What is a townhouse?

A townhouse is a unit that shares one or two walls with other homes, usually built in a row. Townhouses are individually owned and sometimes belong to a homeowners association, which may take care of community services such as garbage pickup. You have control over the exterior of your home and are responsible for maintaining it.

As such, the difference between a condo and townhouse is that you must maintain both the inside and the outside of a townhouse, but you’re only responsible for interior upkeep with a condo.

Like with single-family homes, living in a townhouse can mean having some outdoor space in the form of a backyard and front yard. But unlike with stand-alone homes, townhouse owners have neighbors in relatively close proximity.

How much does a townhouse cost?

Townhouses typically cost more than condos but less than single-family homes. Any homeowners association fees for a townhouse will likely be lower than condo HOA fees, since townhouses require exterior maintenance by the owner and generally don’t offer as many amenities.

Townhouse prices vary from place to place, but you can expect the following upfront and ongoing costs.

Upfront costs

  • Down payment
  • Closing costs

Ongoing costs

  • Monthly mortgage payment
  • Property taxes
  • Homeowners insurance
  • HOA fees, if applicable
  • Some or all utility bills
  • Interior and exterior maintenance

Is a townhouse right for you?

If you want more space and privacy than a condo but can’t afford a single-family home in the real estate market where you’re browsing, then a townhouse could be a good option for you. Below are some of the perks and downsides to owning a townhouse.

Pros of buying a townhouse

  • More privacy, square footage, and control compared with condo ownership
  • Cheaper HOA fees, if applicable
  • Outdoor space, like yards or a rooftop deck
  • More affordable than a single-family home

Cons of buying a townhouse

  • More maintenance required than with a condo
  • Less space compared with a single-family home
  • Lower resale value than a house
  • Shared walls with neighbors

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Single-Family Homes

If you’ve always dreamed of owning a house with a big yard, then you may have your heart set on a single-family home. However, keep in mind that houses come with greater costs and responsibilities.

What is a single-family home?

The term “single-family home” refers to a stand-alone house. It’s often depicted as the classic, idealized version of homeownership.

Like with townhouses, single-family homes enjoy yard space. When it comes to townhouses vs. houses, however, a key factor is that single-family homes have space on all sides of the dwelling and don’t share walls with other units.

As with condos and townhouses, single-family homes can be part of a homeowners association — and it’s becoming more common. According to U.S. Census Bureau data, 80% of new single-family houses sold in 2020 were part of an HOA, compared with 64% in 2010.

How much does a house cost?

A single-family home typically costs more than a townhouse or a condo because it tends to be bigger and come with more land. Additionally, you’re responsible for all upkeep and repairs.

The cost of a single-family home will depend on several factors, including the size and location. Here are some of the main costs of owning a house.

Upfront costs

  • Down payment
  • Closing costs

Ongoing costs

  • Monthly mortgage payment
  • Property taxes
  • Homeowners insurance
  • HOA fees, if applicable
  • Some or all utility bills
  • Interior and exterior maintenance

Is a house right for you?

If you have kids or pets (or both), the bigger yard space and relative privacy of a single-family home may make this option more attractive to you. Below are some of the advantages and disadvantages of buying a house.

Pros of buying a house

  • Reliable resale value compared with a condo or townhouse
  • More square footage, privacy, and control over the home
  • Outdoor space in the form of a front yard and backyard

Cons of buying a house

  • Less affordable than condos and townhouses
  • Full responsibility for repairs and maintenance

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The Cost Differences Between Condos, Townhouses, and Single-Family Homes

The purchase price of your preferred home type isn’t the only cost difference you need to consider. For example, you might not pay homeowners association fees when you own a single-family home, but you have to deal with landscaping costs, unlike when you own a condo.

Here’s a breakdown of the different costs you can expect to pay based on home type:

Expected Costs for Condos vs. Townhouses vs. Houses

CostCondoTownhouseSingle-Family Home
MortgageYesYesYes
Property TaxesYesYesYes
Homeowners InsuranceYesYesYes
HOAYesSometimesSometimes
Utilities SomeSome or allSome or all
Maintenance and RepairsInterior onlyInterior and exteriorInterior and exterior

And below is an explanation of how certain costs of homeownership may be affected by the type of home you choose.

Mortgage

The purchase price of your home influences different areas of your mortgage, such as the down payment, closing costs, and the size of your loan. So, choosing a more expensive home type could result in greater difficulty putting 20% down — which is required to avoid private mortgage insurance — as well as higher expenses over time in the form of interest on your loan.

Additionally, compared with buying a single-family home or townhouse, purchasing a condominium can be more complicated. That’s because condo financing may be subject to various restrictions, depending on the property and whether it’s a warrantable vs. non-warrantable condo.

A warrantable condo is one that meets the guidelines of federally backed mortgage corporations. A condo is deemed non-warrantable when lenders determine that it’s too risky of an investment, like if the community contains too much commercial space or allows short-term rentals.

If you’re interested in getting a government-backed loan, the Federal Housing Administration keeps a searchable database of FHA-approved condo projects. You can also request a customized condo report with a list of projects approved by the Department of Veterans Affairs.

Homeowners insurance

With less square footage in a condo, you may be able to score lower rates for homeowners insurance compared with townhouses and single-family homes. Condos are often cheaper to insure because the policy only needs to cover the interior of the home. Michele Hass, president of Brooklyn MLS, a platform for real estate agents in New York City, notes that the overall building would have its own insurance policy to cover the rest of the property.

Similarly, condo owners don’t need to pay for liability coverage outside of their units. Liability insurance for townhouses and single-family homes, on the other hand, must cover any accidents that occur on the property, both inside and outside of the home.

Regardless of home type, your lender will likely require a minimum amount of coverage.

Home resale value

The resale value of your home will depend on market conditions at the time of the sale, plus how well you’ve maintained the property. Ideally, you’ll have taken good care of the home and made improvements to increase its value.

Read More: What Is a Cash-Out Refinance and How Does It Work?

If you’re looking for the best resale value overall, a single-family home is the safest bet, according to Simon Isaacs, owner and broker at Simon Isaacs Real Estate in Palm Beach, Florida.

“I believe houses have better long-term resale value followed by townhouses and condos,” Isaacs says.

With a condo, you have less influence over your home’s resale value because you can’t control how the building or residential complex is maintained. However, that also means you won’t have to do as much to protect the value of your home, since you aren’t responsible for the exterior and common spaces.

HOA rules and fees

The restrictiveness of homeowners association rules can vary significantly by home type. Condos tend to have the most constraints, from pet and rental guidelines to limitations on the remodeling you’re allowed to do. No matter what type of home you live in, you must abide by the HOA’s rules. Breaking them can result in unpleasant consequences, like a fine or ban on using some of the community’s amenities.

Similarly, the cost of HOA fees can depend on home type. Fees for condos are typically higher because they take care of maintenance on your home’s exterior, as well as the larger building or residential complex. Condos also tend to offer a variety of amenities that hike up fees.

With townhouses and single-family homes, you can expect to pay lower HOA fees because you’re in charge of maintaining your home’s exterior and the surrounding property — but this also depends on what services are provided by the HOA.

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How To Decide Between a Condo vs. Townhouse vs. House

When deciding between a condo vs. house vs. townhouse, it really comes down to your priorities. If you want to become a homeowner without having to deal with some of the maintenance or landscaping, you may be happiest living in a condo.

“Condos are best fit for working professionals looking for smaller spaces and convenience of the amenities that might be present in the building, young couples buying their first place, and retired couples that are looking to downsize,” Hass says.

On the other hand, single-family homes offer perks like increased square footage — both inside and outside of the home — as well as more freedom to do what you want with the property. This can also mean higher costs and a less central location, but for some people, the tradeoff is worth it.

“I would recommend a single-family home for those clients who have young families and/or love the freedom of having their own space and backyard,” Isaacs says. “While there is more upkeep, there is something to be said for having the space to entertain and personalizing your backyard.”

For certain homebuyers, townhouses offer the best of both worlds: more space and reasonable costs.

Related: How To Find a Real Estate Agent in 7 Steps

If you’re having trouble choosing, here are some factors you’ll want to consider when deciding which type of home to buy:

  • Finances: Evaluate your income and debts to see what type of home fits into your budget. Remember that townhouses are generally less expensive than single-family homes, and condos may offer amenities that you otherwise might not be able to afford with a house.
  • Location and community: A condo or townhouse can help you afford to live in a more populated, central neighborhood. However, you can still develop a sense of community with a single-family home, if you make the effort.
  • Lifestyle: If you must commute into the city every day, then you might want to choose a condo or townhouse to be closer to work at a lower cost. However, if you need more space for kids and pets, then a single-family home might be a better fit.
  • Rules and regulations: If you choose a condo, you need to be ready to accept the rules set by your homeowners association. Keep in mind that townhouses and single-family homes can also be part of HOAs, though the rules aren’t usually as restrictive.
  • Fees: Condos, as well as some townhouses and single-family houses, require that you pay regular HOA fees. They tend to be more expensive for condos because you don’t need to handle maintenance outside of your home’s interior.

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The Bottom Line on Buying a Condo vs. Townhouse vs. House

Condos, townhouses, and single-family homes all offer the satisfaction of homeownership, a place to plant roots, and the opportunity to make a financial investment. However, each home type has a unique set of benefits and drawbacks due to the differences between them. When you’re shopping for homes, be sure to weigh how much space you need, where you want to live, and how much you’re willing to pay so that you can choose the home that best suits your needs.

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