Condo, house, townhouse or apartment? How to choose

Finding a new place to plant roots isn’t solely about the price tag. Your real estate search is likely to include a range of options: condo vs. townhouse, condo vs. house, house vs. townhouse and more. As you stack different types of properties against each other, it’s important to think about not only what you can afford, but also your preferences and expectations as a homeowner or renter.

“When it comes to deciding which style of home to focus their search on, buyers should consider their budget and lifestyle, as well as their desired amount of involvement in home maintenance,” says John Ameralis, a licensed associate broker and leader of The Ameralis Team at Compass in New York City.

Maybe you’re a first-time homebuyer, or an empty nester looking to downsize. No matter where you are in life, consider this your primer on what type of housing will best fit your needs.

Condo vs. house vs. townhouse vs. apartment

Condos

A condominium (or condo for short) is a salable unit within a larger community, which could be a high-rise building. Condos can be a good option for anyone who wants to keep home maintenance to a minimum, including first-time homebuyers, singles, older homeowners or people who travel frequently. Condos are similar to apartments, in that both are likely to share multiple walls with neighbors. There is one major point of distinction, however: You own a condo, and you rent an apartment.

Of all the home types on the market for sale, condos “require the least amount of maintenance. You only need to maintain the ‘walls in,’” Ameralis explains. So, if the roof is leaking or the carpet in the lobby needs to be replaced, that’s not your responsibility — the condo association handles those duties. In addition, some condo buildings have doormen and offer an extra level of security, particularly in large cities.

Of course, you and all your neighbors pay HOA or condo fees to cover the costs. Condo association rules can be highly restrictive, as well. You may not be able to customize your unit the way you want, and you may be prohibited from renting it out to others.

Those who value privacy might find a condo’s communal areas less than ideal, too. “It is important to keep in mind that in condos, even the most exclusive ones, you are still sharing elevators and other amenities,” explains Judy Zeder, a Realtor with the Jills Zeder Group at Coldwell Banker in Miami.

Pros

• Limited maintenance
• Extra security

Cons

• Monthly fees
• Communal spaces

Houses

When most people talk about buying a house, they mean purchasing a single-family home, which is a standalone structure on a foundation. It doesn’t share walls or common spaces as condos, apartments and townhomes do, and it may also come with a lot of land to enjoy.

Two of the biggest points in favor of buying a house are privacy and the freedom to decorate and maintain it however you like. (Within the frame of local ordinances and/or HOA guidelines, of course.) “Owning your own house gives you more freedom to live how you want to versus condos, which have bylaws that govern what you can and cannot do,” Ameralis says.

Single-family homes are usually the most spacious housing option, and you can expect a higher price tag to reflect that. The average single-family home sold for $58,000 more than a condo in 2020, according to data from real estate brokerage Redfin.

In addition to paying more up front, you’ll likely pay more down the road, too. Owning a house means you’ll be responsible for all of the lawn care, maintenance and repairs, which can be considerably more cumbersome than you’d have with another type of home.

Here are more house vs. condo differences.

Pros

• Freedom over aesthetic choices
• More space, both outdoors and inside

Cons

• Higher price
• All maintenance is your responsibility

Townhouses

Townhouses can be much cheaper to buy than a single-family home. Some even have small yards or patios. However, most modern townhouses have fairly small footprints and shared exterior walls with neighboring homes.

Townhouses also usually come with HOA rules and fees. When it comes to the ability to make your own choices, you might have a bit more autonomy than condo owners, but your decisions still typically have to be HOA-approved.

“The older a townhouse development, the higher the maintenance fees tend to be, because the communal parts of the property — whether it’s the grounds, a pool, roofs or siding — need to be repaired over time,” explains Andrea Webb, a Senior Real Estate Advisor with Keller Williams Realty in Montclair, New Jersey.

For homebuyers debating between a house or a condo, a townhouse might be the best of both worlds. You get more space, often in multiple levels (like a single-family house), with less exterior maintenance (like a condo).

Pros

• Lower price
• More space

Cons

• Monthly fees
• Shared walls

Apartments

An apartment is any residence inside of a residential building where the individual units are rented, not sold. In bigger cities, these can be condos that are being individually rented. Apartment buildings often have shared amenities for tenants, like a gym or a pool.

A big factor in determining if a condo or apartment is right for you comes down to money: Do you have enough cash to put toward a down payment? You can use Bankrate’s rent vs. buy calculator to get a good idea of which is a better financial move for you.

There are other questions to consider, too. How long do you plan to live there? Are you likely to have a job or lifestyle change that would require you to move? If you plan to move within five years, it could be better to rent than buy for now.

Renting an apartment provides a place to live minus most of the responsibilities that come with homeownership. However, as with condos, you’re limited in the changes you can make (think paint colors or fixtures), and the landlord can dictate things like whether to allow pets. Also, you won’t build any equity, nor get the tax perks that come with homeownership.

Here are more condo vs. apartment differences.

Pros

• Flexibility to move
• No maintenance

Cons

• No equity or ownership benefits
• Must abide by landlord’s rules

Bottom line

To help you choose among a condo, home, townhouse or apartment, consider your savings account, how much space you need, how long you plan to live there and how much money you can comfortably put toward repairs, maintenance and remodeling costs.

Visit open houses and search online listings to see what’s on the market in your price range. Consider working with a real estate agent to help you narrow your choices, and do in-depth research so you have a solid understanding of the process. If you aren’t sure of where you want to land just yet, follow Bankrate’s Housing Heat Index to get a sense of where you might be able to find a good deal today.

For this and related articles, please visit Bankrate.com