Buying a House vs. Condo vs. Townhouse

When shopping for a new home, you may not want to limit your search to just standalone houses. In fact, a house isn’t the best option for everyone. If a lower maintenance lifestyle sounds enticing, a condo may be a better fit. If you want something smaller than a house but bigger than a condo, a townhouse might best suit your needs.

Comparing the pros and cons of the various housing options — a condo vs. townhouse vs. house — can help you make the right decision for your situation.

What is the difference between a condo, townhouse and house?

Condos, townhouses and houses are all different housing options that will come up when you’re searching for a home, so it’s important to know the difference between the three.

Condos

A condominium, or condo for short, is a building structure that is divided into multiple units, much like apartments, but they are separately owned. The land that the condos sit on and the amenities in the complex are community property and are shared and maintained by the condo owners. Homeowner’s association (HOA) fees cover these costs.

Townhouses

Townhouses are homes that have at least one wall that is shared with another independently-owned home. They are usually tall and narrow with two to three levels and are built side-by-side in rows of similar homes. The owner of a townhouse owns the building as well as the land it’s on, which usually includes a front and back yard. The owners are responsible for the upkeep of their property. However, there may be modest HOA fees for the upkeep of common areas.

Houses

A house is a detached structure that sits on its own piece of land and the owners are solely responsible for the upkeep of their homes and everything that comes with them.

Buying a condo vs. a townhouse

How do these types of homes compare to each other? Condos tend to be less expensive than townhouses because they are smaller and don’t come with a parcel of land. This makes them an appealing option for people who want to own property but who aren’t keen on maintaining a yard or a larger home.  However, you are often limited in your ability to customize or renovate condo units as developers want to keep them all uniform. You’ll also often need to pay the homeowner’s association (HOA) fees for the upkeep of the community areas.

On the other hand, a townhouse often comes with more square footage, a more “house-like” feel and the property in front of and behind the home. Owning the land means you get more freedom when it comes to customization and maintenance. These homes are usually found in communities with shared areas that also require HOA fees. However, the fees are often lower than with condos because the owners of townhouses care for their own yards.

Buying a house vs. a condo

Condos and houses each come with vastly different benefits. Condos are smaller and low-maintenance while houses are usually larger and require heavy maintenance. Condos provide community and houses provide privacy. Condos often come with shared amenities like a pool and gym, while houses that come with these amenities will have to be independently maintained. Houses also come with the parcel of land they sit on while condos do not come with any land.

A condo is better for someone wanting a low-maintenance lifestyle with affordable access to shared amenities who enjoys a close community. A private home is probably the best option for someone who wants their own space, is ready to take on the responsibility of maintenance and who wants the freedom to customize their home and property how they see fit.

Buying a house vs. a townhouse

A townhouse offers some of the benefits of a house while still keeping some of the benefits of a condo. With the townhouse, you often get a yard and more freedom to customize your home while still living in a community with shared amenities. The HOA fees are usually lower than a condo but you are often expected to maintain your property yourself. It is a good middle ground for people who want private outdoor space without living completely detached and on their own property.

A house often provides more space, more privacy, more freedom and much more responsibility. It is good for those who are prepared to take care of all of the demands that come with owning your own land and house. It also can be exciting for those who want to customize their home to their own specifications. This is often a good choice for a growing family with stable finances.

The bottom line

When weighing whether a condo, townhouse or a house is right for you, it will come down to identifying your priorities. Do you prefer the freedom to customize your home or less responsibility? Do you want more or less space? Do you want to live in a community or do you prefer privacy? As you answer these questions, the type of home you should get will become more clear.

Keep in mind that the right type of home for you may change throughout your life. A condo may be right in your younger years when you are single and career-focused. If you are starting a family and working full-time, you may want more private outdoor space while limiting the amount of maintenance required of you. In this case, a townhouse will be suitable. As you increase your income, a house with its higher maintenance costs may become appealing. In retirement, you may circle back around to wanting the ease and comfort of condo life.

While all three options provide the necessities for building a loving home, each has its own benefits that appeal to different stages of life and situations. If you still need guidance, speak with a real estate agent to get a professional opinion.

Next steps

Jessica Walrack

Jessica Walrack is a personal finance writer at SuperMoney, Interest.com, The Simple Dollar, and PersonalLoans.org. She specializes in taking personal finance topics like loans, credit cards, and budgeting, and making them accessible and somewhat fun.

Read Previous How to Use… Read Next How to Get…