What IS the Difference Between Condo And Townhouse?
What is the difference between condo and townhouse? A first-time home buyer may not know the differences between condos and townhomes as the living spaces share many similarities. If you’re thinking about either one as a new home, you’ll want to keep reading.
In today’s market, single-family homes are hard to find due to high demand for housing. The main differences between a condo and a townhouse are how the living spaces are built.
Not to be confused with apartments or duplexes , condos and townhouses offer a higher-end living experience. The single-family homes are located in prime real estate areas and cater to those who want to invest in property rather spend money paying rent. But the most important question is, what are your personal preferences?
Before we go further, let’s do some background research to learn about how condos and townhouses became what they are today.
History Of The Condo
Condo is short for “condominium.” Condo is short for the word “condominium.” The word is a combination of “con,” which means “together” and “dominium,” which means “ownership’. It essentially means “co-ownership.”
Graystone Manor, built-in 1960 is cited as the first modern condominium in the US. Recently, historical accounts traced the condominium back to New York City in the 1800s.
However, the condo became famous in the 80s as Americans started earning more money and needed something to do with it. A condominium is a private residence that is owned or rented. Often, an owner of a condo will rent it to a tenant based on an annual contract.
Today, due the short-term rental market, and travel platforms like Airbnb, a condo can be rented for a few days by a traveler.
History Of The Townhouse
The townhouse originated in either London or Paris in the 1600s. It later emerged in New York City after Europeans immigrated to New York City, where it became a form of middle-class housing.
The word “townhouse” was used in early England, where it referred to a dwelling a family kept “in town” when their main residence was in the country.
What Are Property Taxes?
If the property tax rate is 4 percent and your house’s assessed value is $200,000, then your property tax liability equals or $8,000. The assessed value is often computed by incorporating the purchases and sales of similar properties in nearby areas.
The owner of a townhouse or condo must pay property taxes.
Today, the states with the highest property tax rates are New Jersey, and Illinois, New Hampshire.
What Is A Condo?
A condo, or condominium, is a building that has many different living areas in it. Each area has its own entrance, even if to a hallway, and its own amenities, such as bathroom and kitchen. It is very similar to an apartment.
The difference is that in a condo, you own the space you live in. While you can rent a condo, in most cases, you will buy it instead. When you do rent a condo, you’re renting the area that one person owns rather than renting from the building owner.
Owning a condo involves paying property taxes. Each unit has an owner but the building is owned by the condo owners. While one person may have purchased it to begin with, contracts ensure equal rights within the community.
Condos come with things like tennis courts and swimming pools, you’ll like condo living. You can enjoy the benefits of a pool without the hassle of owning one. You can play tennis every weekend and not have to worry about court fees, but you will be expected to pay monthly fees. Most condo buildings come with fitness centers.
What Is A Townhouse?
A townhouse is a house that doesn’t have more space. There may be a backyard, but there is no access to the exterior sides of the house. The house on Full House is a townhouse if that helps.
A townhouse can be rented or owned and can even be turned into a duplex. It is simply a style of house instead of a type of housing. Townhouses offer access to townhouse communities.
But townhouses always have two walls covered by other buildings. Whereas condos aren’t about what they look like but rather how they are used. Condos are like apartments while townhouses aren’t associated with apartments.
If you want square footage, you’re not going to find much of it with either choice. They don’t have the outdoor amenities that come with a new home, so you should be aware of that before signing up.
What Is An Apartment?
An expensive apartment is pretty much like a condo. Although not a dream home, each family has a living space that belongs only to them. However, the building is owned by a landlord to whom you pay rent. One distinct feature is how you can’t buy an apartment.
In urban areas, you’ll find apartment buildings and very few condominium buildings or townhomes.
In a condo, there are different rules as you do own the area you live in, just not the land. The rules are usually just city or district codes. In an apartment, you follow the rules that are set by the landowner.
You have very little say, but also very little responsibility with an apartment. You follow the rules, take care of your own unit, and do things very similar to the way they are done in dorms for college kids.
Major Difference Between A Condo vs Townhouse
Now that we’ve got the simple differences and definitions explained, let’s take a look at the more technical differences. Instead of looking at the pros and cons, let’s take a look at the facts so you can decide for yourself.
Condo Owners And Townhouse Owners
Condo owners and townhouse owners are two different people. A condo owner deals with more responsibilities because their property is part of a building. A townhouse owner only has to worry about their townhouse.
A townhouse owner must pay hoa fees, but a condo owner doesn’t have to worry about that. In the condo vs townhome debate, condos might come out ahead in the long run.
Townhome owners can enjoy living in a detached single family home. The townhouse community supports those who live in the area, so each one is like a mini-suburb. With membership to a homeowner’s association, townhome owners have an extra layer of protection against outside developments hurting their communities.
Nicer townhome communities will pay higher hoa fees.
Condo owners have full ownership of their unit yet share joint ownership of the building. All the condo owners share ownership in the building and is known as a condo community. Condo owners have common areas that they use which are shared spaces. Before you move in, make sure it’s the right fit.
You also own part of the gym, pool, and any other amenities like trash pickup, snow removal, and snow plowing. You even own part of the hallway, yard, and airspace. And again, with condos there aren’t any hoa fees. Unlike townhomes, a condo isn’t a detached single family home.
When it comes to townhouse ownership though, it is just one family involved, similar to traditional houses. Whoever bought the townhouse owns it. The ownership works just like any other type of home.
When Is The HOA Involved?
HOA, the homeowners’ association, will become an everyday name if you live in a condo. Both of these options have an HOA. The rules of the condo and townhouse are often set by the HOA. But the terms are different.
In a condo, the people of the HOA own part of the building. They take care of the common areas and maintenance. They can collect fees among other things. In a way, the HOA is more strict in a condo.
In a townhouse, there is a line. You own the property. There may be an HOA that makes rules since the walls of your home are attached to other homes but they don’t have as much power. In any case, you can join the HOA.
How Much Does A Condo Or Townhouse Cost?
Cost is always a factor, whether you’re building a house or buying. Both condos and townhouses are cheaper than houses set on land that is detached. But when it comes to a condo or a townhouse, there is a difference.
A condo is cheaper because you don’t have to buy land. Property payments are shared with the other tenants and distributed by HOA. Townhouses on the other hand are handled by you, the homeowner.
Contact a realtor to find out the range of condos and townhouses in your area. They can give you an accurate range of what you are looking for to help you compare the two in your town.
The Right Fit
This is a big question that is asked often. Do you have more responsibilities with a condo or townhouse? The other end of this is that people believe that more responsibility also means more freedom.
When it comes to condos, you are responsible for paying your monthly house payment. HOA can help you through things step-by-step, which can help a lot. But with a townhouse, you’re responsible for everything.
A condo building is safer, and the shared amenities are a detractor. Townhomes offer fewer amenities, but they have one or more walls that separate bedrooms and interior spaces. Condos tend to be safer because many of them come with security.
Growing families on the other hand will choose a townhome because they are pretty much like a home.
Condo vs Townhouse Communities
Even with HOA involved, you’ll have more community living in a condo. On that same note, you’ll have more privacy in a townhouse. Each of these has a list of pros and cons and really depends on the family.
If you have children with who you want to interact with other children safely, a condo may be great because you can keep it local. However, forced interaction may happen with a condo which isn’t great if you value privacy above the community.
So this comes down to whether a good community that you can trust is more important or having your own privacy is more important. These are the two actors to consider when choosing between a townhouse and a condo.
Where Can I Have A Yard?
If having your own yard is important, then don’t even consider a condo. You can have a courtyard but it will be shared with other tenants. If you choose a condo, you won’t have any personal outdoor space. When it comes to townhouses, you can have your own backyard and occasionally a small front yard. You may have to follow rules but they shouldn’t be too strict.
Investing In Condos And Townhouses
If you’re thinking about the long run, then you are thinking about which type of housing is the better investment. This depends on the area you live in, how the economy in the area is going, and a million other things. You won’t lose money on a condo. However, it’s also not as big of an investment.
Owning A Condo
But if you don’t have the money to lose, then a condo is a safer investment. Much like an apartment, you won’t be losing anything if you decide to move out. In fact, another tenant will probably have someone in mind to buy the unit right away.
Condo owners control the building. There’s condo association which offers assistance in resolving issues. There are plenty of shared common spaces, so the living environment is social.
Investing In A Townhouse
A townhouse may be riskier but since you have more freedom, you’ll be able to affect the resale value personally. This can be scary to those with no experience with houses, but it can be a dream for those who want to make it big. you can even flip a townhouse if the HOA allows it, which they usually do. This just isn’t possible with a condo.
Short Term Rentals
Short term rentals (STRs) are skyrocketing. You could buy a condo or townhouse and list the property on Airbnb where it would generate money. Retired homeowners and first-time homebuyers have been rushing to get in on STR game.
With more people working from home, the business travel experience has changed. This has fueled major growth within the STR industry. However, like most things that are popular and lucrative, there are benefits and drawback to real estate investing.
For example, some short term renters turn out to be noisy neighbors. HOAs will try and shut you down, but what they’re discovering how they’re not as powerful as they thought.
Condo Or Townhouse?
If you still don’t know whether you should get a condo or a townhouse, don’t worry. This isn’t a decision that can be made overnight. It is important to weigh the pros and cons on a personal level to find what works for you.
It is also nearly necessary to talk to a realtor you can trust. Find out what the perks of each are in your particular area and if they are even both available. There are some areas without condos and some without townhouses.
If there is only one type available then your decision has already been made for you. Just don’t rule out other options, like apartments, or affordable detached houses. You’d be surprised what a good realtor can find for you.
Frequently Asked Questions (FAQ)FAQ
What Are Homeowners Associations?
Homeowners associations, known as HOAs, manage common or shared property, protect owners’ property values, provide services to residents, and develop a sense of community through social activities and amenities.
Homeowners association fees are monthly dues collected by the HOA from property owners. These fees are standard for most purchased condominiums, apartments, and planned communities. Some neighborhoods that consist of single-family homes also have HOA fees.
Which Floor Is Best In Condo?
Buying a unit on one of the middle floors is the ideal choice if you want to avoid the extremes of the upper and lower levels. You can still use the stairs with ease, and traffic noise is tolerable at this level. On a higher floor, you won’t have to have to deal with street noise.
Can You Change The Floors In Condo?
Many HOAs require permission only where a homeowner is making structural changes to their unit. New flooring is generally not considered a structural change to a unit, especially if the finished flooring material is not being changed, say from carpeting to wood.
Can You Put Hardwood In Condos?
As most condos have a concrete subfloor, engineered hardwood flooring is required for your home. Concrete subfloors also absorb airborne and structural noises and will require a sound barrier underlayment or glue with a sound barrier with your hardwood flooring.
Why Are Townhouses Cheaper?
Privacy: you have less private space than in a house and typically share walls with your neighbors. Land: smaller lot size. Resale value: townhouses usually experience less capital growth than a house, roughly the same as an apartment.
Lawn maintenance isn’t an issue. This is usually covered in your HOA fee. Be sure to check the HOA rules and regulations before you agree to anything. Some townhouses are detached houses, but as we’ve said, it depends on your area.
How Much Does It Cost to Build a Townhouse
A single-family home, the national average cost for building a single townhouse is between $115,500 to $237,500, with most people paying around $175,000 per square foot.
Condo And Townhouse Conclusion
Condos and townhomes are pretty similar in many ways, but they’re also different in many others. Either living space is a popular option are popular options based on their convenience. Condo and townhouse communities feature outdoor spaces that are fun for the entire family. Depending on where you live, property taxes could be a detractor or a blessing.
If you’re looking for a single family home and want extra privacy, a detached single family home could be just the thing. This would also provide you with a little private outdoor space. With condos come HOA fees or condo fees, and again, this will depend on location. If you don’t have a family, individual units are available in most condominium buildings.
As an investment, condos are easier to resale, but that too will also depend on your market. However, both condos and townhomes could generate money in the short term market. Before you make a decision, sit down a figure out if a condo or townhouse is right for you.