Should You Buy a House or a Condo?

If you are in the market for a new home, there are plenty of options available, but two of the most common choices are a single-family house or a condo. There are significant differences between these two types of housing and it’s important to fully understand the differences before putting in an offer. 

Here are a few things to consider when trying to decide between a house and a condo:

Differences between a house and a condo

Differences abound between a house and a condo, everything from how many neighbors you have to the how they are insured varies between a house and condo, here are some of the biggest differences:

• Ownership: When you purchase a single-family home, you own both the structure and the land it sits on. This is not true with a condo where you only own your particular unit. All of the common areas, the building itself and the land it sits on are not owned by you. However, this also means that in most cases you are not responsible for cleaning or maintaining the common areas or the landscaping which can be a big time saver. 

• Neighbors: A single family home lets you choose your neighbor situation. If you like to be in the thick of things you can purchase a home in the city or in the suburbs where you have plenty of neighbors. If you like privacy and a quieter setting you can look for a more rural home where you may not have any neighbors. 

A condo on the other hand limits your choice. If you purchase a condo you will absolutely have plenty of neighbors and depending on the location of your unit there could be neighbors on all four sides of you. 

• Custom Look: Houses come in all shapes, sizes and styles. You can choose from a two-story, ranch, traditional, modern or many other options that fit your personal style. In addition, unless you live in a neighborhood with an HOA you are free to paint, customize or just make changes to the exterior of your home as you see fit. 

This is not necessarily the case with a condo. While you can certainly change up the inside of your unit, you have no control over the exterior of the building or the common areas. In addition, almost all condos have a HOA in place and the rules can be strict depending on your HOA board. You may need to get permission to make certain changes, even to the inside of your unit. 

Other Things to Consider About Houses vs. Condos

In addition to the differences above, there are a number of things you need to consider when choosing between a condo and a house. Here are a few things to think about:

Cost: House and condo prices can vary dramatically depending on the location. While a condo is often the more affordable option, in major cities they are often just as expensive (if not dramatically more) than a single-family house in a more suburban setting. As an example, a condo in San Francisco would most likely be much more expensive than a single-family house in Des Moines, Iowa. 

It is always necessary to consider the cost when looking for a new home and your budget may end up making the choice for you. Experts recommend keeping your mortgage payment to no more than 30 percent of your gross monthly income so keep that in mind when deciding whether a condo or house is right for you.

Insurance Costs: In most situations, insuring a single-family home will be more expensive than insuring a condo. Insurance for a single-family home includes any outbuilding or detached garages on your property as well as all of your contents. The insurance company will be on the hook to rebuild your entire home if it is destroyed by a covered peril.

Condo insurance on the other hand only covers your particular unit and your contents. The building itself and all common areas are covered by the master policy which the HOA handles. This makes it less risky for an insurance company which leads to a lower premium. Condo insurance also includes liability coverage in the event someone is injured in your until. 

Insurance for a house or condo can be pricey depending on its location so always get multiple homeowners insurance quotes before deciding on a particular house or condo. This is especially true if it is located in an area that is prone to severe weather or forest fires. 

Maintenance: In this category, a condo comes with a big advantage if you don’t like maintenance and yard work. The only thing you are responsible for is the inside of your unit, which can include HVAC systems and appliances but the HOA will handle all exterior and common areas maintenance as well as yard work. 

A single-family house on the other leaves you responsible for just about all maintenance, including the yard work. It is always important to maintain your home to prevent small damage from turning into a major issue. In addition, if you fail to maintain your home properly, it is possible that your insurer can deny a claim. 

HOA: Almost all condos come with an HOA and a lengthy list of rules that you will need to follow. These rules can involve whether or not you can have pets, where you can park, even color choices. A single-family home on the other hand will not always involve a HOA leaving you free to make your own rules. 

However, many single-family homes (particularly in the suburbs) come with an HOA these days so if you are not comfortable with an HOA make sure you choose a neighborhood that doesn’t have one. 

Amenities: This is usually a big winner for condos. The majority of condo communities comes with hotel like amenities that include a pool, workout room and even a business center. 

These types of amenities can be very expensive for a homeowner to install and a pool can take up a significant amount of yard space while also being expensive to maintain, insure and install. 

Location: Location is always an important consideration when buying a home and where you are calling home can impact what type of house you end up buying. Smaller towns and suburbs often don’t have near as many condo options as a big city. Condos are often located in densely populated areas where it is easy to walk to shops, restaurants and everything else a city has to offer. 

Houses can go either way depending on where they are located. Major cities have plenty of single-family homes that are located in easy to walk to areas while others, out in the suburbs and beyond, usually require a car but come with more space. 

The Bottom Line

There is no right or wrong answer, deciding between a condo and a house is a decision that you will have to make based on what is right for you and your family. In general, condos tend to be best for a homebuyer who is looking to limit the amount of maintenance they have to do, enjoy living in a more densely populated area and like the amenities that come with a condo building. It can also be a great choice if you cannot afford a single-family home in the area you prefer. 

While a house will often come with more space both indoors and out, it also comes with much more maintenance. If you prefer privacy and being able to make decisions about your property without getting HOA approval a single-family home is probably the best option.