Are you in the market for purchasing your own place? Have you ever wondered what the pros and cons are for a condo/townhome and single family home? Having lived in all of these types of housing, I wanted to share a little bit about my perspective.
Please note that there is no right or wrong answer although people may tell you otherwise. It really is about your needs at your current stage of your life and making the best decision for you and your family.
Growing up, my dad used to always tell me that if I ever bought my own place, I should get my own house versus a condo or townhome because I would own the land. Generally speaking, this made sense to me as I thought it would be nice to have a backyard to grow plants or maybe have a dog around. But as I got older, I came to realize it really wasn’t that simple as there were so many other things to consider.
So what is exactly the difference between these housing structures?
Condo: A condo (or condominium) is very similar to an apartment complex in that there are typically multi-family housing units within a building or complex. There are shared walls on the sides and can also have units above and below. While some units might have a balcony or outdoor area, there generally isn’t much of a backyard. Condos are typically run by a board or HOA (home owners association) that dictates rules for the entire community such as whether or not there is a doorman or what third party security firm to employ.
Townhome: Townhomes are very similar to condos in that they share a wall but typically they are larger and do not have units above or below them. They often look and feel like stand alone homes but they have common walls and are attached. An example might be rowhomes that are popular in San Francisco or on the East Coast where the population may be more densely populated.
Single Family Home: Just as it sounds, a single family home is a detached structure in which you own a home and the land the structure it sits on. In some instances, there might still be an HOA that you will belong to which makes rules for the community and maintains common areas such as a community swimming pool, playground and tennis courts. However, in other cases there is no HOA and no shared spaces that you have to pay for.
How much can you afford?
Budget: This was my first and most important consideration when I bought my first placee since I really didn’t have much money and even if I wanted to spend more, it wasn’t like I could qualify for a bigger loan. This was by far the most important and daunting part of the process which was to understand what I could afford.
Generally speaking, assuming you are in the same location in a neighborhood – condos are going to be the most affordable, followed by townhomes and then single family homes. However, one key thing to remember is that aside from just the mortgage and property tax, there are other costs that can vary.
Additional Costs And Consideration
-HOA (Homeowner Association Fees): The costs for this can really vary depending on how fancy a complex you live in. Some amenities that may be included in a condo complex include gyms, community center, doorman etc. Depending on the condo complex, some utilities may be included but generally speaking things such as earthquake insurance, roof maintenance, landscaping etc. (anything that would be benefit the community at large is bundled in here. Townhomes and detached homes may have similar costs as well for shared amenities if you live in a gated community or have shared common spaces like a playground or park as well.
However, many detached homes live in communities that do not have home owners associations. Again this is a matter of personal preference as some people think it is great to have an association that enforces certain rules such as the paint colors you may use on your house or whether or not you can park outside. While others find them to be very onerous and seek communities that do not have HOAs. The great news about detached homes is that you have an option to see what works best for you.
-Insurance: As mentioned earlier, certain types of insurance are typically included with condo units such as earthquake insurance and general hazard insurance. As a condo owner, you will however need to pay for a “walls in” insurance which means insurance covering everything inside of your specific unit. This is also true of townhome owners as well. For detached homeowners, you will need to cover your hazard insurance as well as any additional earthquake insurance you may want to get.
-Maintenance: This is an interesting one because people have a lot of different perspectives as it relates to what they find acceptable and enjoy. For some people, they find the thought of dealing with moving lawns, pruning bushes and dealing with landscaping as a huge painful task while others find great solace and joy in working outside in their gardens.
For example, many people really enjoy growing fruits, vegetables or various types of plants. From my personal experience, it can be incredibly frustrating when it goes wrong but also incredibly rewarding when you are able to produce some really great things to eat and share.
-Neighbor/Board/HOA Issues: The most obvious difference between Condos, Townhomes and Single Family Homes is how densely you are living together. Condos you’re potentially going to have neighbors above, below and on the sides of you. With Townhomes you will likely share walls with at least one neighbor and with homes depending on the size of your lot, you could still be very close to your neighbor.
-Parking: If you own cars and need a place to park them then this could be an important consideration. Often times condos might have parking structures, covered parking spaces and/or uncovered parking spaces that are on a first come fist serve basis. If you really hate the thought of walking to your car or searching for parking, this might be an important consideration versus have an attached garage to your home. Not that I’ve ever had a fancy car but obviously if you do and are worried about other people being able to park to close or ding your car, that is another consideration.
-Walkability: Similar to owning a car, another important consideration for many people is access to public transport and if you are able to walk (or travel conveniently) to somewhere you want to go.
Quick Answer: It Depends
Just like some many things in life, I don’t think there is a right or wrong answer. It is really dependent on what you can afford, what things make you happy and where you are in life. When I was young and single, I really enjoyed apartment and condo living since I wasn’t home very much and didn’t need a lot of space. Eventually, when I got married I realized that we needed a bit more space and moved into a townhome. Once we had a child, we realized that we wanted to have more of a backyard and started to look into single family homes.
I realize for many people that this might be a more simple question around economics. What can I afford? Where can I get the best bang for my buck? Living in a fancy condo in downtown might be the same amount of money (if not more) than living in a large home in the suburbs. It really depends on what you value and what makes you happy. I knew plenty of people who raised their families in condos and townhomes who were very happy. Currently, I know several retirees who are now looking at downsizing as they realize they don’t need so much space in their homes. If that’s an important consideration in your life now, I can tell you that often times living in a single story home due to health constraints has become very important as well. One of my close neighbors had knee replacement surgery and realized that having a two story house was extremely difficult on his body.
Another important consideration is where you live location wise. If you live in a densely populated area, you might have less options for size of properties. If your goal is to live near the beach, then again you may have stiff competition for properties. If however, you decide to live somewhere housing is more affordable you can determine how much size and space you need.
And most importantly remember, housing just like anything else in life is not forever. If you move somewhere and you realize that you don’t like it, you can always change. Just stay positive as sometimes you really won’t know what you need or like until you go through it. Good luck!
Please let me know your thoughts and share your experiences as I’m excited to hear what you think are the pros and cons of living in these various property types.
Financial Questions Answered 