When it comes to looking for a home to buy, there are many things to consider beyond size and curb appeal. The type of housing itself is important and sometimes confusing: take condos and townhouses.
When you live in a condo, you own everything from the walls in. When you own a townhouse, you own not only the structure but also the land it sits on. Townhouses are usually smaller and more affordable than single-family homes and are typically part of a homeowners association.
“Condos are great for buyers who are happy to pay a maintenance fee to the condo board in exchange for the management of the property,” says Kate Wollman-Mahan, an agent at Coldwell Banker Warburg. “In my experience, a townhouse buyer is typically someone willing to forgo the peace of mind that comes with having others manage the property for them because they crave the privacy that comes with their own home.”
Get clear on your wants and needs to narrow down your hunt when you are shopping for a new home.
“Buyers should consider how they want to live,” says Jeff Benach, principal of Chicago-based Lexington Homes. “Rarely do prospective buyers go out looking for either a condo or a townhome, as buyers typically know the general housing type that will work for them from the beginning of their search.”
The Differences Between Townhouses and Condos
Townhouses and condos are different for several reasons, but the biggest is the ownership structure.
“Homebuyers are often confused by the term condo,” Benach says. “Condominium is actually a form of ownership or deed rather than a building type.”
A townhome can operate under two types of ownership, he explains. It can have a condominium ownership arrangement or fee simple ownership, like a single-family home. In the first type, you own just the unit itself from the walls in. In the latter, you own both the townhome and the land it’s on. Fee simple refers to a complete type of ownership, where you pay to purchase a property outright and don’t share common areas or portions of the property with other owners.
“It’s for this reason that in any multi-unit building, whether it is two stories tall or a 75-floor high-rise, it has to be deeded as a condominium if the units are owned by different people or entities,” Benach explains. When multiple units are built vertically, you have to share the land and rights with other individuals.
What Is a Townhouse?
Unlike condos, townhouses are similar to single-family homes.
“Townhouse owners have full ownership of their units, including the land,” says Mike Fabbri, licensed real estate salesperson with The Agency in NYC. “Owners generally have control over the exterior appearance and landscaping of their home.”
When you live in a townhouse, you own the building and the land; maintenance of both is your responsibility.
Townhouses are homes built in rows or clusters, often with shared walls. “Townhouses share walls with neighboring properties unless situated on a corner lot. Corner lots are coveted as they offer more windows and sometimes side yards,” Fabbri says.
“For a townhouse, if something goes wrong, the maintenance cost falls squarely on the shoulders of the owner of that townhouse,” says agent David Harris of Coldwell Banker Warburg. “So, when the roof goes or a pipe bursts in the basement, it’s solely the owner’s responsibility. If the roof of a condo building needs repair, it’s a shared cost among all of the owners of units within the building.”
“Townhouses provide more privacy and space than apartments and are generally easier to maintain than detached single-family homes,” Fabbri adds.
Townhouses are typically part of a homeowners association, much like condos. Single-family homes can be part of an HOA, but it’s not a requirement for that type of property.
Townhouses tend to be more expensive than condos but less expensive than single-family homes due to their size.
“A townhouse is typically governed by an HOA,” says Opendoor broker Jennifer Patchen. “There are monthly fees and restrictions involved here, too, so those expenses need to be considered.”
Living in a townhouse lets you enjoy the best of both single-family living and condo living in that you have some control over your space but still benefit from shared amenities at a reduced cost.
“Townhouses are often historic and arranged in rows,” says Patchen. “For those looking for a living arrangement somewhere between an apartment and a house, a townhouse might be just the thing for them.”
Because they are sometimes historic buildings, you might face some regulations around how you can alter their appearance or structure. If you don’t like the idea of following an HOA’s rules and want more privacy, a townhouse might not be right for you.
What Is a Condo?
Condos are individual units that often have shared walls in part of a larger building. They can be large and encompass entire floors or grouped tightly, like apartments.
“A condominium, or condo, is a unit within a building or a community owned by an individual or an entity,” Fabbri says. “This ownership structure is more common in cities and urban areas but can also be found in the suburbs. Amenities and all common areas, such as lobbies, elevators, fitness centers, and hallways, are owned collectively by the condo owners and are governed by the association, which enforces rules and regulations.”
When you live in a condo, you own the property from the walls in. The property the condo sits on is owned by the HOA, which oversees landscaping and maintenance of shared amenities.
“Monthly or annual fees are paid to the association for the maintenance of the common areas and building exterior,” Fabbri adds. “Association rules vary widely and must be carefully reviewed before purchasing as they impact your activities and mandate certain upkeep.”
Condos tend to be less expensive than townhomes, given they are a bit smaller in general, but fees for associated HOAs can vary greatly.
“In addition to the purchase cost and monthly payments, there are special assessments that can come up at any given time—and cost a pretty penny depending on the project that needs the funds,” Patchen says. “From special exterior renovations to interior upgrades, condo owners need funds available in order to be prepared for assessments.”
Condos are usually part of an HOA or managed by a condo board or property management company, much like townhomes, meaning there are rules you must follow.
“HOA rules and restrictions can be a major disadvantage because they govern lifestyle choices, including pet ownership, entertaining abilities, and noise restrictions.”
Mike Fabbri, real estate salesperson, The Agency in NYC
Living in a condo lets you enjoy the best of both single-family living and apartment living in that you have a more stable living arrangement in terms of your monthly payments, but you still benefit from shared amenities such as a pool or gym but at a reduced cost. There are also tons of service-related perks you might not think of in condo settings.
“Having someone open the door as you approach the building, receive your packages or dry cleaning, change your HVAC filters or lightbulbs, and service your appliances are aspects of convenience and luxury enjoyed by condo owners,” Harris adds.
If you’re looking for more control over your property or want a little more privacy, a condo might not be the best choice for you.
Deciding Between the Two
When it comes down to it, deciding between a townhouse and a condo depends primarily on your lifestyle and the amount of control you want over your property.
“Townhouse buyers often value privacy and security, but ironically, after researching the market, many end up purchasing a condo because of the privacy and security they provide from doormen to staff to concierges,” Fabbri says.
Condos offer convenience and shared amenities but often at the cost of autonomy.
“Assess whether the amenities at a building you are considering align with what you like, if you would actually use them, and then gauge your appetite to pay for said amenities through HOA fees,” Fabbri says.
On the other hand, townhouses give you more freedom and control over your space but require more upkeep from the owner.
“A townhome offers more privacy than a condo—buyers have a garage with direct access from the home and don’t have to share an elevator.”
Jeff Benach, principal, Lexington Homes, Chicago
“A townhome provides a single-family home experience due to its larger floor plan and multiple levels of living space as compared with a condo without the buyer having to maintain an entire house and yard,” Benach says.
Something else to consider is the standard condo layout, which Fabbri says offers less light due to shared walls and fewer overall windows.
“Generally, if someone has a preference for light and views, they seek out condo ownership,” he says. “By the nature of its property type, townhouses can be darker and generally offer street views as they are only a few stories above the ground.”
Evaluate Your Finances and Lifestyle Preferences
“It’s important to evaluate the financial aspects of owning a condo or townhouse,” says Dana Hall-Bradley, Realtor and Owner at Better Homes and Gardens Real Estate Fine Living. “A buyer should think about long-term plans and whether expenses associated with owning a condo or townhome are worth it in the long run. Will the home appreciate like a single-family home? Is it good for resale? What if there are assessments in the future? Can I afford them?”
Hall-Bradley also finds that your point in life might dictate the style of home you prefer.
“In my real-life experience, buyers with families are leaning more toward the townhome lifestyle versus the condo lifestyle,” she says. “The condo buyers are retired and looking for a maintenance-free lifestyle with amenities. They are looking for a more worry-free living experience.”
If you’re looking to buy one or the other, finding a trusted real estate agent first is important.