Once you’ve decided where you want your new home to be located, it’s time to decide what kind of home you want. The three major choices are condos, townhouses and detached houses. Each has its benefits and drawbacks, and entails a significantly different lifestyle and set of responsibilities.
If you don’t like living in an apartment, condo life is probably not for you. You’ll still have shared walls, a shared parking garage and shared common areas. You won’t have complete control over your property, because you’ll be subject to homeowners’ association rules that may control minute details of your life, such as what kind of Christmas lights you can put up or what kind of doormat you can lay out.
Also, buying a condo may not be as good of an investment as a house. Because a large number of condos can be quickly built on a small piece of land, it is easy for the number of condos on the market to increase dramatically in a way that doesn’t happen with houses (unless you live somewhere that still has plenty of open land to develop). And, when it’s time to sell, it can be harder to differentiate your unit from others that are also for sale in your building.
If you get along well with others, don’t mind apartment life and don’t mind paying homeowners’ association fees every month for as long as you live in the condo, a condo might be the right choice for you. The main advantages of living in a condo over a house are that you don’t have to worry about maintaining a yard or the exterior structure. In addition, you may feel an increased sense of security if you live alone. Condos also tend to be more affordable than purchasing a house.
A townhouse is sort of a hybrid between a condo and a house. These are often two stories, meaning that you don’t have downstairs or upstairs neighbors and therefore can have a bit more privacy and peace and quiet (especially if you can get an end unit, which will only have one set of neighbors). Townhouses also often have attached garages on the ground level, providing greater convenience and privacy than a condo parking garage, and there may be fewer townhouses in a development than there would be units in a condo building.
Like condos, townhouses have homeowners’ associations (and their attendant monthly fees) and you won’t have to worry about maintaining the building’s exterior. Townhouses are often priced similarly to equally sized condos but if you’re looking for something with absolute entry-level pricing, you may not find it in a townhouse because they’re generally larger than condos, and may even have small yards.
A house can be the most expensive option in terms of both total purchase price and ongoing maintenance, but it also gives you the most independence and privacy. You won’t have any shared walls, floors or ceilings, and you’ll even have a yard and perhaps a fence to act as a further buffer between you and your neighbors. A yard is also great for children, pets, barbecues, private pools, hot tubs and relaxing in the fresh air. Houses are also generally larger than condos, so you’ll probably have more space.
However, whatever goes wrong with the structure (and things will go wrong from time to time), you’ll have to pay to fix it and you’ll also be responsible for maintaining the yard (or paying someone to maintain it). Houses typically have the best investment value and because a house is all yours, if you outgrow it, you will have the option of adding on, whereas if you have a condo or townhouse, the only way to get a bigger living space is to move. Also, while your monthly mortgage payment might be higher, you won’t be giving a couple hundred dollars to the homeowners’ association every month, so a house’s price might be more comparable to a condo than it appears at first glance – although expenses for a house will undoubtedly be higher. However, there are some houses that belong to homeowners’ associations, so be aware of that when you’re shopping.
Regardless of which type of housing you prefer (and can afford), you’ll also have to decide on size. How many bedrooms and bathrooms do you and/or your family need to live comfortably? Is the amount of space you need now the same amount of space you’ll need in the future (e.g., are you planning to have kids, take in an elderly parent or start a home business that will require an office)? Do you want an extra space to rent out to help pay your mortgage? Do you want to use the property as an investment property one day, and if so, what size would be best for that purpose? Can you afford the size of property you want, and if not, can you make do with less or should you keep renting until you can afford something bigger? Be aware that the bigger the property, the higher the purchase price, the higher the ongoing maintenance costs, utility bills and insurance, and the more you may need to spend for things like furniture and upgrades when you move in.
Another consideration is that in some locations, one home size or type predominates. If you need a certain size or type of home, you might actually need to decide on that before you decide on your location rather than the other way around. For example, you may want a two-bedroom, one-bathroom house, but there may not be any houses that small in your chosen neighborhood – your smallest option may be a three-bedroom, two-bathroom house.
The Great Outdoors
Finally, consider what kind of outdoor space comes with the property. If it’s a condo or townhouse, does it have any private balconies or decks or a little patch of lawn to call your own? Is there any common green space, a play area for kids, a pool or a hot tub? Do you plan to make use of these things, or will your homeowners’ association fees just be wasted on their upkeep? Are you willing to share these facilities with other people or do you want the private ownership and use of them that may only come with a house? Do you have pets and what kind of indoor and/or outdoor space do you need for them? Will the homeowners’ association allow you to have the pets you want? Do you want to be able to entertain outdoors?
When you purchase a condominium, townhouse or other type of property in a planned development such as a leased land property, a gated community, or even an ordinary subdivision, you are obligated to join that community’s homeowners’ association (HOA) and pay monthly or annual HOA fees for the upkeep of common areas and the building. If you are considering purchasing one of these types of properties, you should be aware of the following nine things about homeowners’ associations and how they work before you buy.
Homeowners Association (HOA) Basics
First, let’s take a look at what HOAs are all about. HOA fees often range from $200 to $400 per month. The more upscale the building and the more amenities it has, the higher the homeowners’ association fees are likely to be. In addition to monthly fees, if a major expense such as a new roof or a new elevator comes up and there aren’t enough funds in the HOA’s reserves to pay for it, the association may charge an extra assessment that can run into the thousands of dollars. Because multiple parties live in the same building, all residents of condominiums and townhomes must be equally responsible for maintaining the common areas of the building such as landscaping, elevators, swimming pools, clubhouses, parking garages, fitness rooms, sidewalks, security gates, roofing and the building exterior. Many of these types of common areas, such as pools and tennis courts, also exist in subdivisions of single family homes. Regardless of whether the HOA governs a building, such as a condo or townhome structure, or a neighborhood of individual houses, HOA fees help maintain the quality of life for the community’s residents and protect property values for all owners.
In addition to maintaining common areas, HOAs also set out certain rules that all residents must follow called covenants, conditions and restrictions (CC&Rs). In a common building, rules may include what color front door you may have, whether you are allowed to line dry your laundry outside, whether you can have a satellite dish, the size and type of pets permitted, and so on. In many ways, these rules are similar to the types of rules apartment dwellers must follow.
In a subdivision with individual homes, regulations may include what color you can paint your home, the exterior landscaping you can do, the types of vehicles you can park on the street or in your driveway (no RVs, for example), permissible type and height of fences, and restrictions on window coverings for windows facing the street. If you want to do anything that differs from these rules, you will have to convince the HOA to grant you a variance, which is probably unlikely. No matter where you live, you are likely to be subject to city ordinances and restrictions related to the use of your property. HOAs add yet another layer of restrictions and because their members are more likely to know what you’re up to, the HOA is more likely to enforce the rules. So, let’s take a look at some of the rules and regulations you need to know about before you decide to join one of these communities.