Housing is less affordable than ever. Median prices are up 25% nationwide in the last two years, and the appreciation is even sharper in some areas, like the Mountain West. With prices going up as quickly as they are, it may seem to some aspirers that their homeownership dreams will never come true. Luckily, there may be a solution for affordable housing. Sometimes referred to as middle housing, smaller housing units like condominiums and townhomes can be an affordable solution for people who want to own their homes but can’t afford larger single-family homes.
You might be thinking, “This is all great, but what does it mean for me?” You’re in luck. We’re going to break down the similarities and differences between condos and townhomes for those not in the market for a single-family home.
Similarities
Ownership
The first thing you’ll find in common between most condos and townhomes is that in the majority of cases, you can own your unit. In most situations, you are responsible for the property inside your walls. The main instance when you wouldn’t own your unit is when you opt to rent a condo or townhome from the person who does own it.
HOAs
Most condos and townhomes belong to homeowner’s associations (HOAs). This means that you’ll be paying a monthly fee to cover the cost of certain amenities and maintenance. While the amenities and maintenance are generally a positive, one drawback of HOAs is that there can be restrictive regulations around what you can and cannot do with your property.
Amenities
Going hand-in-hand with the HOA, many condos and townhomes come with certain amenities. These amenities often include gyms, pools, clubhouses, parking, and other common spaces.
Maintenance
HOA fees often cover some level of maintenance for both condos and townhomes. Common maintenance items could include snow removal, exterior maintenance, tree trimming, lawn mowing, and other landscaping duties.
Affordability
As we’ve already mentioned, condos and townhomes both tend to cost less than a traditional single-family home. This often means that you can even get more square-footage in a condo or townhome.
Rentability
Just as condos and townhomes are typically owned by their occupants, they are also often rented out by their owners. This could be a consideration for you if you plan to occupy your condo or townhome when you buy it and rent it out later, rather than selling it.
Shared Walls
In most instances, when you purchase a condo or a townhome, you can plan on sharing walls with at least one neighbor. If that level of proximity is a dealbreaker for you, then you may want to consider other options.
Appreciation
Because they are tailored to more of a niche market, condos and townhomes both tend to appreciate in value more slowly than a single-family home. If your rationale for purchasing real estate is largely to hold it as an investment, you may be better off with a single-family home. That said, a condo or a townhome will still likely increase in value, just at a slower pace.
Differences
Hybrid Unit
You’ve seen how similar condos and townhomes can be. This is because a townhome is a hybrid between a condo and a single-family home. Many of the differences between a condo and a townhome are similarities to a single-family home.
Vertical Units
Townhomes typically have two to three stories. You generally have no upstairs or downstairs neighbors in a townhome, where you likely would in a condo. In a townhome, you usually share a wall with your neighbors to the right and/or left. However, you won’t have upstairs or downstairs neighbors as you might in a condo.
Full Ownership
When you purchase a townhome, you are more likely to own and be responsible for the upkeep of both the interior and exterior of the unit. With a condo, you will probably only be responsible for the interior of the unit.
HOA
While you’re still likely to have an HOA requirement in a townhome, you are less likely to belong to an HOA than you would be in a condo. If avoiding HOA fees is a priority for you, you’ll have better luck looking for a townhome.
Amenities
If your unit belongs to an HOA, you’re likely to have amenities at your disposal. However, townhomes generally have fewer amenities than condos do. If the amenities are a motivating factor for you, you’re probably better off pursuing a condo.
Space
Condos and townhomes typically differ in sizes. When it comes to square footage, condos trend smaller and townhomes trend larger. When weighing these two options, you simply make a tradeoff between the costs and benefits of both kinds of units.
Yard and Garage
If you buy a townhome, you are more likely to get a unit with its own yard and garage. If having these features is important to you, for example, if you have a pet or a car, you may want to pursue a townhome instead of a condo.
Ready to start your home-buying journey and get into a condo or a townhome? Get in touch with an agent or start looking at listings today.