In the real estate business, there’s often confusion between the terms “condo” and “townhouse,” and some people use them interchangeably. However, there are distinct differences between the two.
Condo: A condo refers to the interior space of a housing unit, which may include a porch or balcony. Essentially, when you purchase a condo, you own the space within the unit’s walls. The exterior surfaces and the land the building is on are typically owned collectively by the homeowner’s association (HOA).
Townhouse: On the other hand, a townhouse includes both the interior and exterior surfaces of the dwelling, as well as the land it is built on. Townhouses are often multi-story and share common walls with adjacent units. Townhouse owners typically have ownership rights to the land beneath their unit.
Homeowner’s Association (HOA): When you buy a condo or a townhouse, you become part of a homeowner’s association (HOA). The HOA is comprised of all individuals who own units within a specific development. An elected executive board holds regular meetings to approve budgets, implement policies, and oversee the care of common elements such as landscaping, pools, fitness centers, and more.
Monthly Fees and Special Assessments: Being part of an HOA comes with a cost, usually in the form of monthly fees. These fees cover various expenses such as insurance, landscaping, snow removal, water and sewer fees, taxes, utilities, and the upkeep of common areas. Additionally, the HOA may establish a reserve fund for future projects like roof repairs or parking lot paving. In some cases, homeowners may be required to contribute to a special assessment if there’s not enough money in the reserve to cover unexpected major repairs or upgrades.
Trade-offs: While some may view HOA fees as additional expenses, the trade-off is often less maintenance responsibility. Condo and townhouse living means less time spent on tasks like lawn care, landscaping, and snow removal, allowing residents more free time to pursue other activities.
Deciding whether owning a condo or townhouse is right for you involves weighing the benefits against potential drawbacks. Consider your lifestyle preferences, the level of maintenance you’re willing to take on, and your budget before making a final decision.