Buying a condo vs. a house

Condo vs. single-family home

A condo, which is short for condominium, is a housing unit you can buy within a larger complex. They’re usually grouped with other similar units, though condos within the same complex can have different floor plans and sizes.

Condos are similar to apartments in many ways. Condo complexes, like apartment buildings, often offer amenities such as swimming pools or gyms for neighbors to share. However, condos are usually owned by their occupants rather than a landlord.

As a general rule, you aren’t responsible for outside property maintenance, like landscaping or structural repairs, when you own a condo. You usually pay a monthly fee that goes toward these expenses.

A single-family home is a free-standing dwelling that’s situated on a piece of land that the homeowner also owns and maintains. A single-family home is detached from other housing units (unlike a townhouse, which shares common walls). These homes also have private entryways, which isn’t always the case with a condo.

Condo vs. townhouse

A townhouse can seem like the best of both worlds. Townhouses provide some of the feel of a single-family home while usually requiring less maintenance and expense, making them more affordable for many first-time homebuyers.

However, townhouses are generally part of a homeowners association (HOA), so you may still be required to pay monthly or annual fees for maintenance and amenities. Some HOA fees only cover mowing for common areas, so you could still be responsible for taking care of your yard.

Benefits of buying a condo

One attractive quality of a condo is that there’s less maintenance and responsibility for the owner. For the most part, you’re only responsible for maintaining the condo’s interior, and the property manager should take care of the exterior. Community spaces and shared amenities are also strong perks — these may include movie theater rooms, game rooms, tennis courts, pools, and a grill or picnic area.

Condos often come with shared community spaces, such as gyms, swimming pools, game rooms or outdoor kitchen areas.

Owning a condo usually comes with lower overall costs than owning a house. Condos tend to sell for less than single-family homes in similar areas (partly because you aren’t purchasing the land). The median condo price in January 2022 was $297,800, according to the National Association of Realtors (NAR). The median price for a single-family home at the time was $357,100.

Though you may have to pay monthly HOA or condo fees if you own a condo, these expenses are typically lower than the added costs of owning a single-family home. Most homeowners pay 1% to 4% of their home’s value in maintenance costs every year, with the average annual cost being $3,018, according to Angi.

HOA fees for condos vary greatly depending on the building’s amenities and the location, but they usually range from $100 to $700 a month. These fees may also include utilities, like water or trash service.

Insurance premiums on condos are also less expensive than homeowners insurance for single-family homes. On average, condo owners pay $512 per year for insurance, while homeowners insurance costs $1,278 per year, according to the National Association of Insurance Commissioners (NAIC).

Drawbacks

A big drawback to owning a condo is the lack of privacy. The units are close together, so residents are more likely to hear what their neighbors are up to. A loud get-together in one unit can disrupt families throughout the building.

Condos also come with built-in fees from the HOA or condo association. A single-family homeowner can comparison shop for lower prices on various services, like landscaping, and they can even decide to do some maintenance tasks themselves to save money. A condo owner doesn’t have the same opportunity to choose what services they want to pay for, though.

Make sure you understand what you’re responsible for in terms of maintenance and repairs if you choose a condo — one of our reviewers in California had a major issue with the garage door in their condo shortly after moving in and would have been in a rough financial situation if they hadn’t purchased a home warranty prior.

Benefits of buying a house

The biggest draw of a single-family home might be privacy. You can have a large yard with trees to keep you shielded from your neighbors. Even if you live in a neighborhood with houses on small plots of land, you still won’t share a wall with your neighbors, which helps reduce unwanted noise and disruptions.

Also, homeowners have more freedom to choose how to renovate their spaces. You can tear down walls or build more rooms (as long as you obtain the appropriate construction permits). While renovations aren’t impossible for condo owners, they’re still limited.

Single-family homes also tend to appreciate faster than condos, mainly because there’s often a higher demand for homes than for condos. According to NAR, single-family home values rose 15.9% from January 2021 to January 2022, while condo prices saw a 10.8% increase during the same period.

Drawbacks

Single-family homeowners usually spend 1% to 4% of the value of their home on annual maintenance.

One downside to owning a home is that the overall costs are typically higher. Buying a house is more expensive than buying a condo on average, and those averages might not even represent the actual cost difference because condos are more likely to be located in expensive urban areas.

Single-family homeowners also have more maintenance responsibilities than condo owners. In addition to mowing and landscaping, they have to maintain the home's outside appearance; if the windows are rotting, they have to get them fixed or replaced. Homeowners can expect to spend between 1% and 4% of their home’s value on yearly maintenance.

Another downside to owning a home is that your home’s value could be affected by the appearance of your neighbors’ homes. If you have a neighbor who collects items that pile up outside, potential buyers might shy away.

Bottom line: Should you get a condo or a house?

Whether you’re buying a condo or a house, real estate can be a great investment. When you buy a property with a mortgage, you can potentially lock in a monthly payment that won’t change over time. Renters, on the other hand, can be subject to payment increases whenever their leases end.

Buying a single-family home could make more sense if you have cash saved for expenses and you want a lawn and walls of your own. Also, if you can make most repairs yourself, home upkeep could cost you less. While homes carry higher overall costs, they also appreciate faster than condos.

On the other hand, it may make more sense to buy a condo if you are concerned about keeping up with maintenance tasks or you live in a big city where home prices have skyrocketed.

Weigh the costs against the potential benefits of all your options to decide what type of property is right for you.