Speaker 1 0:00

Buying a condo or townhome can be an attractive option for many people . With lower price points and less maintenance , it would seem like a great purchase for a first-time home buyer . There are a lot of misconceptions about condos and townhomes that can lead to confusion and misinformation , and to help clear that up , i've put together a list of 10 common myths about condos and townhomes , along with the pros and cons of each one . First , i wanted to just clarify what exactly a townhome or a condo is . A condominium , often shortened to condo , and townhomes are two types of housing arrangements that offer alternatives to your traditional standalone single-family homes . A condo is a type of housing where you own your individual unit but common areas are shared with other unit owners . This might include amenities like hallways , elevators , exterior landscaping , swimming pools , gyms and other shared facilities .

Speaker 1 1:08

Condos can come in many forms . They can be part of a larger building or complex . They can be structured like townhouses or even detached homes , but what makes them condos is the ownership structure . As a condo owner , you'll typically pay homeowners association HOA fees to cover the cost of maintaining the common areas . A townhome is a style of housing that often looks like skinny , tall single-family homes , usually with at least two , sometimes three or more floors . They share walls with other townhomes . What differentiates townhomes from condos is that the townhome owners also own the land their home is built on , including any front or backyard that comes with it , and are usually responsible for all its exterior maintenance . Like with condos , townhomes are often part of an HOA that manages community features and maintenance of common areas . Both townhomes and condos can offer more affordable options for home ownership , especially in densely populated areas . The shared responsibilities can mean less individual maintenance , but also comes with less privacy and potential restrictions due to HOA rules .

Speaker 1 2:27

So let's talk about these 10 misconceptions . Let's start with number one . Condos and townhomes are for first-time buyers or retirees only . Condos and townhomes often provide a more affordable entry into the housing market and can be a great option for first-time home buyers or retirees looking to downsize . While condos and townhomes can be great for these demographics , they can also be an excellent choice for individuals or families who want the benefits of home ownership without the hassle of extensive property maintenance . They're not restricted to only these groups . They're especially attractive for these groups , but due to the lower cost associated with them and typically easier maintenance , many first-time home buyers can be overwhelmed with the type of maintenance on a single family home . While condos help ensure much of this is taken care of , retirees also tend to want less physical maintenance , like plowing snow , and also to have more amenities like gyms and pools , which is one of the reasons these types of homes are so attractive .

Speaker 1 3:32

Misconception 2 . Condos and townhomes depreciate faster than standalone homes . Condos and townhomes can sometimes be more affordable than standalone homes , making them a more accessible option for many , so overall , their pricing tends to be lower . While it's true that condos and townhomes may not appreciate as rapidly as a single family home , in a booming market , they also tend to not depreciate as quickly . In a downturn , their value is often a lot more stable . The barrier to entry is typically lower from an overall cost , while there are additional fees such as HOAs that may be higher cost than single family homes . Overall , you'll typically find condos and townhomes to be less expensive and in a seller's market where there's low inventory , condos oftentimes become very attractive to people .

Speaker 1 4:26

Okay , the third misconception Owning a condo or town home means you don't have to worry about maintenance . Alright , one of the big selling points of condos is that exterior maintenance and repairs are typically handled by the Homeowners Association , which can save homeowners significant time and effort . While it's true that HOAs take care of exterior maintenance , homeowners are typically still responsible for the interior of their unit . Additionally , homeowners have to pay monthly HOA fees for these services . Not all maintenance is covered . This really is the in-between point of an apartment and a single family home . You still have some responsibility for the interior of your unit , but less responsibility with exterior maintenance and repairs .

Speaker 1 5:09

On town homes , you're actually typically responsible for that exterior maintenance , so something to take into consideration . Now , some examples of interior maintenance are things like just general painting or repairing appliances , updating flooring . The HOA will cover building , exterior pairs , landscaping and common area upkeep , but not much else . That's why it's important to read and understand what's covered or not before making a purchase . Some items like water heaters may be the owner's responsibility if it needs replacement . However , if it serves multiple units , then it's often the HOA's responsibility . There are a lot of nuances and a lot of things to consider when evaluating the cost side of buying a condo or town home . Make sure to work with an agent who understands buying a condo or town home versus a single family home . You'll also want to read the CCNR paperwork in its entirety , as it outlines all the rules . Town homes in particular typically do not cover exterior maintenance , so they're much closer to a single family home than a condo . In this regard , misconception 4 .

Speaker 1 6:22

Living in a condo or town home means you don't have any privacy . While shared walls and common areas can actually foster a sense of community and safety that isn't always present in standalone homes . You may also just have a single shared wall , which may not be very noticeable . In town homes in particular , you'll only have shared walls on the sides . You'll never have someone above or below you . Shared walls can mean less privacy than you would get with a standalone home .

Speaker 1 6:51

Noise can be a problem if neighbors are inconsiderate , and this is definitely one of the trade-offs . While living in a condo or town home can have its advantages , you will need to accept lower levels of privacy and added noise . If extra privacy is important to you , then these types of homes may not be the right fit for you . Now , when touring , really pay attention to how well insulated the walls and floors are . If you can hear your neighbor through them , then that could be a sign of poor insulation and build quality . Additionally , think about how much natural light you get . If the windows are small or the housing layout isn't ideal . That could mean less privacy from your neighbor's view . Listen for things also like road noise , as condos tend to be located on main roads or near highways , make sure to listen and observe as much as possible before making a purchase . It doesn't hurt to talk with the neighbors as well to see what the noise levels are like .

Speaker 1 7:47

Let's talk about the fifth here . You can't personalize your condo or town home . Condos and town homes often come with restrictions on exterior modifications which can help maintain property values and really ensure a consistent , pleasing aesthetic in the community . While it's true that there are usually restrictions on exterior changes , you're generally free to make whatever modifications you'd like to the interior of your unit , within reason . This includes painting , flooring and other minor changes . It really depends on the governing documents of the HOA . Read them thoroughly , as mentioned before , to determine what is and isn't allowed .

Speaker 1 8:27

The sixth one here condos and town homes have exorbitant HOA fees . Okay , hoa fees typically cover common expenses such as maintenance , landscaping and sometimes utilities or amenities which can actually save homeowners time and effort . While HOA fees do cover these expenses , they can be quite high depending on the location and the amenities provided , and they can increase over time . It's important to read the governing documents of the HOA to understand what is and isn't covered by the fees . Ask your real estate agent to look into price increases in the HOA fees and if there are any large expenses coming up that may raise the HOA fee . Also ask about other fees such as parking and storage . All of these fees can add up and should be taken into consideration when planning your budget for purchasing a condo or town home .

Speaker 1 9:22

7 . It's Difficult to Sell a Condor Townhome . Condos in townhomes can be attractive to a wide range of buyers , from young professionals to retirees , and can be particularly appealing in urban areas where standalone homes are much more expensive . Depending on the market conditions and the specifics of the unit and its community , it can sometimes be more challenging to sell a condor townhome than a standalone home . In this environment , it's important to do your research and understand the local market before making a purchase . Ask your agent to look at comparable sales in the area and get an idea of any issues previous owners may have had in selling their units . That can give you a good indication of what to expect when it's time for you to sell . Additionally , make sure you understand how the HOA may affect your ability to sell . There may be restrictions on rental or sale units that could limit your ability to sell quickly .

Speaker 1 10:20

8 . All Condos in Townhomes Are Small and Cramped . Well , condos in townhomes can offer efficient use of space and often provide shared amenities like pools or fitness centers , and often because of that they do have smaller lot sizes And the homes themselves typically aren't going to be your larger size . While it's true that condos in townhomes can be smaller than standalone homes , many offer spacious and actually quite sophisticated layouts . They come in a variety of sizes and floor plans to suit different needs and can actually be very much like a single family .

Speaker 1 10:56

Detached home . Condos vary greatly in size , and , though many are not as large as their single family home equivalents , there are plenty that exceed even 3,000 and 4,000 square feet . One thing that many condos in townhomes lack is a large backyard , so if that's an important factor or something you just can't go without , you may want to consider a detached single family home . The next is condos in townhomes don't allow pets , while some condo and townhome communities do have rules in place to ensure a peaceful living environment for all residents , including restrictions on pets And while some communities may have pet restrictions , many are pet friendly and even have amenities like dog parks . Always check the HOA rules before buying . For example , in California , the Davis Sterling Act requires HOAs to allow pets subject to reasonable rules and regulations of the association . They may have some breed or size restrictions , but cannot outright ban pets .

Speaker 1 12:00

The last here is that renting is a better option than buying a condo or townhome . Renting can offer more flexibility and fewer responsibilities than home ownership , which can be advantageous for certain lifestyles . But buying a condo or townhome can offer many benefits that renting doesn't , such as the opportunity to build equity , potential tax advantages and the ability to make your space truly your own . Ultimately , the decision between renting and buying is a personal one . If you're debating whether to rent or buy , consider your needs and preferences , budget and financial goals , as well as the market conditions in your desired area .

Speaker 1 12:42

Condos are the closest to apartment living , then townhomes and then detached single family homes . From a cost and maintenance perspective , condos will be the least expensive of the option , but will also be the most restrictive . They're a great way to start home ownership , but it's important to decide what your reasons for home ownership are . Moving from an apartment where you have a fixed monthly cost , low utilities and no maintenance costs , to owning your own home can be a pretty big step in both time and money . A condo or a townhome can be a great way to make the transition . It offers the benefits of your own home that you can build equity in , lower maintenance costs and predictive monthly payments . You'll likely feel very familiar with the community concepts and for many it's a very easy transition . It's also a great way to build equity to use in future home purchases that may have been out of your reach previously .

Speaker 1 13:42

If you're looking for the best way to build equity and lower your risk with maintenance costs , a condo can be an excellent choice . There are definitely some extra steps from the finance side of things when considering a townhome or condo and I'll cover that in an upcoming episode , so keep an eye out for that . But basically there are restrictions on the types of loans and the amount of homes that can utilize specific loan programs in condo and townhome communities . Some communities , for example , need to be FHA-approved for you to use an FHA loan to purchase there . I hope this helped you guys get a little bit more understanding about buying a condo or a townhome and how that compares to apartment renting or buying a detached single-family home , and that it might be a good option for you . Now , as always , please visit us at FTHBprosecom for all of our episodes , articles , tools and resources for the first-time homebuyers , including our home affordability calculator and budget worksheets . Thank you and happy homebuying .