House vs. Condo: What Are The Differences
There are so many decisions to be made when you decide to buy your own home. For many buyers, the first initial choice must be between the two primary residential real estate purchases: a house vs. a condo.
Each has advantages and disadvantages, and the experience of living in each can vary greatly. For first-time buyers and older buyers, there can be a certain appeal to condominiums.
For families, the draw of a single-family home is evident. However, every buyer should at least know the basic differences between these types of properties before they rule out one or the other.
When you have never owned either, you will probably be asking yourself should my first home be a condo or a house?
Depending on your situation, you may find that a condo or a home is the only reasonable option.
We will examine the pros and cons of a condo vs. a house. What you learn should give you a better understanding of which type of housing will be best for your needs.
What is a Single-Family House?
It sounds like a silly question, but it will give you a better understanding of the difference between a condo.
A single-family house is a freestanding home not tied to other residential properties.
Typically, single-family homes are located on their plot of land held by their owner, along with other structures like a detached garage. There is typically ample yard space with a single-family property.
Although it’s plausible you’ll find row houses built side-to-side on small lots in densely populated cities, a more typical example is the suburban home on an oversized lot with a large lawn to mow, many trees, and landscape beds.
What is a Condo?
A condominium is a type of residential real estate that offers homeownership on an equivalent scale to apartment living. It may be found in a communal area or at the edge of multiple structures, and its size may vary markedly from house-sized dwellings.
An HOA or condo board is responsible for the appearance of a building and its common spaces – such as parking garages, swimming pools, clubhouses, and fitness centers. As with any other architectural design element, each complex may have different standards depending on size and location.
First-time homeowners, downsizers, and investors find condos an enticing option when purchasing a home. On the one hand, they offer more affordability than houses; however, that does not come without its share of drawbacks – monthly HOA fees!
Condos should not be confused with townhouses that are different from one another in some respects.
Pros and Cons of a Condos vs. House
Let’s look closely at why you may want a condo vs. a house and vice versa. Buying a condo will be much different than buying a house.
Comparing The Size of Condos vs. Houses
In general, the size of a condo is more limited than a house. Or course, this is not always the case – plenty of two-bedroom homes with less square footage than large condos.
However, condominiums are forced to build up more than out, and you can expect them to be smaller than many houses you will look at. This is not necessarily a bad thing.
Depending on your needs, a smaller living space may be ideal. There is less area to clean and less space to accumulate clutter. One consideration buyers should understand is that a condo often has a restriction that prohibits an owner from creating another bedroom.
In other words, you might think the unfinished basement is the perfect opportunity to finish another bedroom. While you may be able to create the actual room, when you go to sell, you might not be able to market it as a bedroom. Condo communities will put deed restrictions prohibiting selling a unit for more than the approved bedroom count.
Maintenance Will Be Easier With a Condo Compared to a House
Reduced maintenance is a benefit that many buyers opt for in choosing a condo vs. a house. Many who have owned a house no longer want to be bogged down with maintenance issues. Keeping up a manicured lawn and landscaping becomes less desirable as you age.
From experience, I can agree wholeheartedly after purchasing three condominiums in different states after owning a house for many years.
When you own a house, you are responsible for its upkeep, including all internal maintenance.
You can also have substantial external maintenance, including mowing the grass, weeding the flower beds, and keeping whatever plants you have alive. You can also expect to rake tons of leaves every fall in many parts of the country.
Some people enjoy the work; others are willing to pay professionals to do it for them. When considering purchasing a condo, asking the right questions beforehand is vital.
Find Out What The Condo Fee Covers to Compare Costs
One of the critical questions you should find out before making an offer is precisely what the condo fees cover and what you are responsible for as a homeowner. The answer could surprise you.
When you own a condo, you pay fees to have the association keep the grounds you share with all the other owners. Often the landscaping is designed for minimal maintenance.
You also have to pay for the maintenance of your particular unit, but you share the cost of upkeep for communal things like the roof for the condo.
Your overall workload for upkeep is typically less when you are in a condo than in a house.
Houses Beat Condos For Privacy
Regarding privacy, single-family homes tend to win out in this regard. A house is a self-contained unit generally separated by at least a little space from other houses.
In contrast, a condominium shares space with other units by definition. This is a significant differentiation point that every home buyer has to decide on personally.
If you value privacy and want space from your neighbors, a house is almost always a better option.
However, there are some advantages to sharing a common area like you do with a condominium. You often have access to better amenities – pool, sauna, hot tub, fitness center – that would be cost-prohibitive to purchase privately.
You may also enjoy being closer to your neighbors as well. The trade-off is that you are unlikely to have as much privacy as you would with a house.
Understanding Financial House Becomes Crucial With Condos
Financial Health is one area where houses and condos vary greatly. Most of the time, with a condo, a homeowners association (HOA) will be in charge of managing the financial health of the neighborhood.
The owners will typically pay a monthly or quarterly fee for several things, including insurance, landscaping, trash, snow removal, general maintenance, and a whole host of other things.
It is possible when a homeowners association is not well funded; there can be special assessments for significant amounts of money. For example, if all of the roofs need replacement due to age.
A standalone home outside of an association generally does not have these considerations.
You own your home and don’t have to worry about whether your neighbors have become delinquent in paying their condo fees.
For this reason, it’s essential to understand some of the best advice when purchasing a condominium. The tips provided in the resource above can make a difference in whether you will be happy.
Financing is Different in a Condo vs. a House
Getting a mortgage on a home vs. a condominium can be vastly different. When buying a home, applying for a mortgage is pretty straightforward. You essentially get the type of loan you are looking for, and that is it.
You can choose the type of loan, conventional, FHA, or VA if you qualify. With a condominium, you must verify upfront that you can use certain loan products.
For example, some condo developments are not FHA-approved. You might be asking yourself, why not? It’s a great question! Getting FHA approved does not cost much money, yet some condo associations do not understand the importance.
As someone interested in a condo, you should because without the ability to get FHA financing, quite a few buyers are locked out from purchasing. Not having FHA approval, of course, can affect the long-term value of your property.
The advantage to a buyer getting an FHA loan is that you only have to come up with a 3.5% down payment. When a condo development is not FHA-approved, it locks many buyers out.
When searching for a condominium to buy, ask your Realtor to check upfront whether the condo is FHA-approved. If an FHA loan is the type of financing you plan to use, you’ll need to verify it’s acceptable.
Location Can Be a Significant Factor When You Buy a House vs. Condo
The location is one area where condominiums can offer an advantage, depending on your priorities. Because condos take up less room than homes, they can be located much closer – and even in – the city you want to live in. With the resurgence of urban living, condos have become far more popular.
Generally, full-size homes are less likely to be found in the middle of a city. You can expect to pay a pretty penny for them when they are. A condominium may be the only affordable option to own a home inside the city.
You may have a little less space than in a house, but for some, this is more than a reasonable exchange for access to all the perks of the location. Of course, if you want a single-family home in the suburbs, it will be less of a concern.
You Give Up Control in a Condo That You Don’t in Most Houses
When purchasing a residential property, buyers choose to enter several different arrangements.
You may buy a home that is pretty much yours to do with as you will. You may also buy a condominium in a neighborhood where you are part of a condo association.
When you purchase a condominium, it is almost always part of a community organization that oversees the upkeep of the units in your complex.
Whether you are purchasing a condo or a home, being thoroughly familiar with the pros and cons of an HOA is extremely important.
For people that want the most control, buying a single-family home that is not part of an HOA is probably the best bet.
You do not have the safety net that an HOA is intended to maintain – making sure the area retains specific standards, that home values remain as high as possible and that all owners comply with agreed-upon covenants and rules.
In exchange for this, you can do pretty much anything you want to with your house – as long as it falls within the rules set by the county you reside in.
Build a tower, paint it all pink or fill the yard with gnomes – it’s your home, do what you like.
Some Homes Have HOAs Too
If you buy a home in a neighborhood with an HOA, you will be more limited in what you can do. You will have to observe the rules of the HOA, which will often control what you can do to your home’s exterior, how many cars you can park in your driveway, and whether you can park on the street.
However, you get the above-mentioned benefits that may keep your neighborhood within specific quality standards.
Those buying a condo will find themselves in much the same position as homeowners in an HOA – there will be rules and membership dues.
There will also be an organization to oversee it all. With a condo, you are sharing even more than a regular HOA. You share the roof with your neighbors and probably some other common areas for which you will also share financial responsibility.
Associations can be good or bad depending on who is running them.
Getting stuck in a place with some rules you are uncomfortable with can make your life miserable. Make sure you determine whether the association is difficult to deal with before purchasing.
An excellent place to start is asking the people that already live there to get their opinions. A local Realtor will probably know if a neighborhood has an unruly homeowners association.
Houses Are Usually More Expensive When Compared to Condos
Single-family homes are generally more expensive than condos. The reasons for this are many – we’ve listed them above. You have more control, privacy, and space in a single-family home.
However, you may want to start owning a home, and condos are more in your price range. You may also be retiring and want to stretch your dollar and limit your yard work.
There are advantages to buying a condo, one of the main ones being cost. A condominium may be the perfect entry-level home for you for various reasons.
Final Thoughts Condo vs. House
Let’s review a final recap of the pros and cons of buying a condo vs. a house.
Summary of The Pros and Cons of Houses
- A private yard for your use and enjoyment.
- Home and yard maintenance is always your expense.
- You are not required to ask anyone if you can paint your house, change your mailbox or put a for sale sign in your yard (in most circumstances).
- You are responsible for taking care of all insurance costs.
- There are no condominium fees to worry about paying.
- Control over what you can and cannot do with your property is yours.
Summary of The Pros and Cons of a Condo
- With a condo, age, pet, and rental restrictions can be good or bad, depending on the buyer.
- You need permission to do almost anything outside of your condo, including landscaping, having a flag, or changing any pre-existing conditions.
- A condo may afford you the ability to have frills you may not otherwise be able to afford at a home, like a pool, clubhouse, or gym.
- Expenses for maintenance cannot be paid on your schedule.
Hopefully, by now, you have started to grasp the pros and cons of buying a condo vs. a house. Each of these housing choices has its advantages and disadvantages.
It is up to you to decide which fits your current lifestyle best. Make sure you give ample time to decide which makes more sense from a financial and emotional standpoint.
Additional Helpful Articles For Purchasing a House or Condo
- What are the best tips on how to buy a condominium via Rochester Real Estate Blog.
- Will condominium living be right for me via Frederick Real Estate Online?
- What to know about living in a High Rise Condominium via The Las Vegas Luxury Home Pro.
Use these additional resources to decide whether a house or condo will be a better housing selection for your needs.
About the author: The above Real Estate information on condo vs. house: the pros and cons of each, was provided by Bill Gassett, a Nationally recognized leader in his field. Bill can be reached via email at billgassett@remaxexec.com or by phone at 508-625-0191. Bill has helped people move in and out of many Metrowest towns for the last 36+ Years.
Are you thinking of selling your home? I am passionate about real estate and love sharing my marketing expertise!
I service Real Estate sales in the following Metrowest MA towns: Ashland, Bellingham, Douglas, Framingham, Franklin, Grafton, Holliston, Hopkinton, Hopedale, Medway, Mendon, Milford, Millbury, Millville, Natick, Northborough, Northbridge, Shrewsbury, Southborough, Sutton, Wayland, Westborough, Whitinsville, Worcester, Upton and Uxbridge MA.
Ryan Fitzgerald says
Awesome article Bill!
It’s helpful to read this and understand the pros and cons between buying a home vs a condo.
There’s a lot that goes into buying real estate, and this will certainly benefit buyers!
Thanks for writing it,
Ryan
Susan Vatter says
Loved the article lots of good points to remember what is best choice for your client and a good guide on what questions to ask your prospective buyer prior to showings.
James machlair says
Hi Bill,
Wonderful article. I think It depends on you that if you are a busy life, then may be condo is the best option and If you really enjoy your space, privacy, then you can choose home. Thank you for sharing these all points with us here.
Bill Gassett says
Thanks for the compliments James and you are right those are two important considerations when choosing between a home and a condo.
Trayson Evans says
The article brings up a good point that if you want to live close to the city, then a condo is more likely to get you there. I would imagine that families that are too big for a condo would prefer to live a little bit outside of the city. That way, they are more likely to be in a neighborhood that fits their priorities.