When you’re looking to buy a home, there are many different factors to consider — like size, location, and, of course, price. But one of the biggest factors will be the type of home you purchase. Exploring the differences between home types may help you get closer to finding the perfect fit for your lifestyle.

 

Whether it’s a single-family home, condo, or townhouse, each home type comes with a different set of pros and cons. Your financial situation and lifestyle preferences may make one a better match for you than the others.

 

If you’re unsure about the difference between condos and townhouses or are eager to learn more about how home types can impact your final cost — don’t worry. We’ve put together a helpful rundown of the major differences between condos, townhouses, and single-family homes:

 

Understanding Structural Differences

The structural differences between condos, townhouses, and single-family homes can have a big impact on the amount of space you have — both inside and outside of the home — as well as what living there will be like. Here’s a look at the major characteristics that set them apart.

What is a condo?

A condominium, or condo for short, is a unit in a building or community with shared amenities and common areas. These amenities can include a gym, pools, event space, and doormen. The perks of condo life often involve neighbors who live close by and frequent the common areas, which can make for a more social lifestyle.

 

So, how do condos work? You own it without having to worry about maintenance and repairs for the exterior of the home. Instead, you pay a regular fee to the homeowners association that maintains the building or community.

 

According to Jordon Scrinko, founder of Toronto condo market resource Precondo, the two biggest advantages of buying a condo are cost and location, as many condominiums offer the opportunity to own property in more central areas.

 

However, he says the downside to buying a condo is less space. For instance, any personal outdoor space is often limited to just a balcony. You also have less autonomy in what you can do with the property you own, as you must abide by the rules of the HOA that manages the building or community.

 

If you’re trying to decide between a condo vs. a house, one determining factor could be if location is more important to you than having additional square footage.

 

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What is a townhouse?

A townhouse is a multistory home that shares one or more of its walls with other homes, usually built in a row. Like condominiums, townhouses are owned by individuals and often belong to communities with a homeowners association.

 

However, one main difference between condos vs. townhouses is that you’re typically responsible for maintaining both the inside and outside of a townhouse. While the HOA may take care of community spaces and services, like garbage pickup, it might not cover maintenance for individual townhouses.

 

Like single-family homes, townhouses usually offer some outdoor space in the form of a backyard and front yard. But unlike with stand-alone homes, you’ll have neighbors in fairly close proximity, and you may be subject to the potentially restrictive guidelines of an HOA.

 

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What is a single-family home?

When we use the term “single-family home,” we’re referring to a stand-alone house. It’s often depicted as the classic, idealized version of homeownership.

 

Like townhouses, single-family homes enjoy yard space. However, when it comes to townhouses vs. houses, a key factor is that single-family homes have space on all sides of the dwelling.

 

“The main difference between a townhouse and a single-family home is that a single-family home has its own piece of land and does not share any walls with another property, while a townhouse maintains at least one common wall with the adjacent property,” says Simon Isaacs, owner/broker at Simon Isaacs Real Estate in Palm Beach, Florida.

 

If you have kids or pets (or both), the yard space and relative privacy of a single-family home may make this option more attractive to you.

 

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How Do Condos, Single-Family Homes, and Townhouses Vary in Costs?

The purchase price of your preferred home type isn’t the only cost difference you’ll need to consider. For example, you usually don’t pay homeowners association fees when you own a single-family home, but you’ll have to deal with landscaping costs, unlike when you own a condo.

 

Read More: 11 Hidden Costs of Buying a Home

 

Here’s a breakdown of the different types of costs you can expect to pay based on the type of home you’re buying:

 

Expected Costs for Condos vs. Houses vs. Townhouses
Cost Condo Single-family home Townhouse
Mortgage Yes Yes Yes
Homeowners insurance Yes Yes Yes
Property taxes Yes Yes Yes
HOA fees Yes Sometimes Sometimes
Home maintenance Interior only Usually interior and exterior Usually interior and exterior

 

Condominiums are typically less expensive than single-family homes and townhouses because you only own the interior of the home, not the exterior. You’re paying for less square footage, which also means lower property taxes, insurance rates, and maintenance costs.

 

On the other end, single-family homes are usually pricier than townhouses or condos — not only in purchase price, but also once you factor in all the maintenance and repair costs that you’ll need to cover.

 

“Townhomes are a great middle ground between condos and single-family detached,” Scrinko says. “Generally, they cost more than a condo, but less than a home.”

 

Here’s a look at how the costs of homeownership may be impacted by the type of home you choose.

Home loans and mortgages

Compared to buying a single-family home or townhouse, buying a condominium can be more complicated. That’s because condo financing may be subject to various restrictions, depending on the property and whether it’s a warrantable vs. nonwarrantable condo.

 

A warrantable condo is one that meets the guidelines of federally backed mortgage corporations Fannie Mae and Freddie Mac. A condo is deemed nonwarrantable if lenders determine that it’s too risky of an investment, like when the community contains too much commercial space or permits short-term rentals.

 

If you’re interested in getting a government-backed loan, the Federal Housing Administration keeps a searchable database of all FHA-approved condo projects. FHA loans offer lower down payments and options for those with low credit scores. You can also request a customized condo report with a list of projects approved by the Department of Veterans Affairs.

 

As for other options, conventional loans are available for different home types, but they typically require a 20% down payment if you don’t want to pay extra for private mortgage insurance.

 

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Home insurance costs

With less square footage in a condo, you may be able to score lower homeowners insurance rates compared to townhouses and single-family homes. Condos are often cheaper to insure because the policy only needs to cover the interior of the home. Michele Hass, president of real estate platform Brooklyn MLS in New York City, notes that the overall building would have its own insurance policy to cover outside property.

 

Similarly, condo owners don’t need to pay for liability coverage outside of their units. Liability insurance for townhouses and single-family homes must cover any accidents that occur on the property, both inside and outside of the home.

 

Good To Know: The First-Time Homebuyer’s Guide to Homeowners Insurance

 

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Home resale value

The resale value of your home will largely depend on market conditions at the time of the sale and how well you’ve maintained and updated the property. If you’re looking for the best resale value, a single-family home is the safest bet, according to both Isaacs and Scrinko.

 

“I believe houses have better long-term resale value followed by townhouses and condos,” Isaacs says.

 

With a condo, you have less influence over the resale value because you can’t control how well the building or community is being maintained. However, that also means you won’t have to do as much to protect or improve the value of your home.

 

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HOA rules and fees

When you purchase a condo, you’ll start paying regular fees to a homeowners association that’s responsible for maintaining the overall building or community. The same is true for some townhouses and single-family homes (but not all) to cover garbage removal and other shared utilities.

 

HOA fees for condos will likely be higher because they take care of maintenance on the home’s exterior and the overall building or community. Condos also tend to offer a variety of amenities, like pools or gyms, which could hike up fees. With townhouses and single-family homes, you can expect to pay lower HOA fees because you’re typically responsible for the upkeep of the home’s exterior and surrounding property, but it depends on the amenities and services provided.

 

Living in a building or community with an HOA has its benefits, but keep in mind that you’ll be asked to abide by certain rules, which may range from your home’s appearance to pet restrictions. Breaking the HOA’s rules can result in unpleasant consequences, like a fine or ban on using the amenities.

 

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Which Home Type Should You Buy?

When deciding between a condo vs. house vs. townhouse, it really comes down to your priorities. If you want to own without having to deal with some of the maintenance or landscaping, you may be happiest living in a condo.

 

“Condos are best fit for working professionals looking for smaller spaces and convenience of the amenities that might be present in the building, young couples buying their first place, and retired couples that are looking to downsize,” Hass says.

 

On the other hand, single-family homes offer perks like increased square footage — both inside and outside of the home — and more freedom to do what you want with the property. This can also mean higher costs and a less central location, but for some people, the tradeoff is worth it.

 

“I would recommend a single-family home for those clients who have young families and/or love the freedom of having their own space and backyard,” Isaacs says. “While there is more upkeep, there is something to be said for having the space to entertain and personalizing your backyard with a built-in barbeque or a swing set for the kids.”

 

For certain homebuyers, townhouses offer the best of both worlds: a good amount of space and reasonable costs. According to Hass, townhouses and single-family homes are often preferable for growing families looking for more space.

 

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The Bottom Line

Condos, townhouses, and single-family homes are similar in many ways. They provide the satisfaction of homeownership, a place to plant roots and build a life, and the opportunity to make a smart financial investment. However, each home type also has a unique set of perks and drawbacks due to their varying costs and structural differences. When you’re shopping for homes, be sure to weigh how much space you need, where you want to live, and how much you’re willing to pay so that you can settle on the home that best fits your needs.