The Differences Between a Condo and a Townhouse

by Tina Broyles, DRE 01009212 & NMLS 91630 04/25/2021

Photo by Pixabay via Pexels

When it comes to home ownership, you have many options beyond buying a single-family home. A condominium and a townhouse are two such options. Before you consider making one of these your permanent home, it's important to understand the differences between them.

Condo Ownership

When you purchase a condo, you own the entire inside of the structure. The condo association owns the exterior, all common areas, and the land where the condo sits. Condo owners are not responsible for exterior maintenance. However, you need to budget for condominium association fees apart from your monthly mortgage payment. This covers the cost of repairs and maintenance in common areas. Most condos are in multi-story buildings.

Townhouse Ownership

When buying a townhouse in a traditional manner, you must pay dues to its homeowner's association. This fee goes toward outdoor maintenance, such as mowing the lawn and shoveling snow. Your fee may also include landscaping services. Townhomes typically appear as conjoined single-family homes.

If you choose to purchase a townhouse in a non-traditional manner, you own the land it sits on as well as the physical structure of the home. This means you are responsible for repairs and maintenance both inside and outside of your townhome. The association that owns a townhouse complex is only responsible for communal repairs such as potholes on the street.

Financial Considerations

You can't deduct homeowner's dues if either type of property is your primary or secondary home. The only exception to this is if you rent it to others. If you occupy the condo or townhouse, you can deduct real estate taxes and mortgage interest if you itemize deductions on your tax return. If you plan to use the condo as a second home and rent it the remainder of the time, make sure that you occupy it less than 10 percent of the time that you rent it. If you don't, the IRS considers it personal property.

The non-mortgage fees for a condo are almost always higher than they are for a townhouse. This is due to more shared areas and additional amenities that most townhomes don't have. These may include a swimming pool, a recreation room, or an area on the roof to suntan or host a barbeque for your neighbors. These amenities all carry an additional risk, which necessitates the need for additional insurance coverage.

The property taxes and initial down payment are typically higher for condos as well. Even so, some people prefer a condo over a townhouse because they feel that not being at street level offers them better security.

If you’re in the market for a non-traditional home, feel free to schedule a consultation. We'll go over your options and find the best home to suit your needs.

About the Author
Author

Tina Broyles, DRE 01009212 & NMLS 91630

HELLO.... Im a California Bay Area Resident serving the Real Estate community since 1987!

I serve people with professionalism, knowledge and care and my business has grown to almost 100% referred as a result.

Happily married with two grown children and two beautiful granddaughters, Audrina & Chesney! 

I love to golf, exercise, Bible study & serve the Homeless weekly in Milpitas.

I support our businesses and our community.

I'm well known and respected by my peers in our community. Voted Best of Milpitas every year since 2000-2020 until we relocated to San Jose in 2020

One of the compliments we consistently hear is how responsive we are to our client’s needs. That is so important to us!

I'd be honored to get to know you and your family and put my real estate experience to work for you!

ABOUT MY BUSINESS:

My Team represents a diverse array of skills and provides the perfect balance of experience and professionalism working in the Bay area. Our technology capability is beyond expectation!

CAL BRE #01009212#01009212 NMLS #2441#2441