For many prospective homeowners in urban environments, the townhouse vs. condo debate can fuel plenty of indecision. In this post, we’ll explore the differences between each type of dwelling so you can make a more informed purchasing decision.
Townhouse vs. Condo: The Basics
Condominiums are groups of individually-owned dwellings. They differ from apartments, which are units collectively owned and rented out by a central authority.
Townhouses, meanwhile, are privately-owned dwellings that share one or more walls with a neighboring residence.
The distinction between townhomes vs. condos is pretty clear when you’re comparing high-rise buildings and conventional suburban townhomes. Things get a little trickier when you attempt to decipher between townhouses and multi-story condominium complexes.
In such a case, the difference between the two largely boils down to ownership and fees.
Townhome vs. Condo: Ownership
When you purchase a townhouse, you have unfettered access to its interior and the land it sits on.
With a condominium, on the other hand, your ownership is limited to the dwelling’s interior. You have no claim to the land your condominium sits on. That said, you do get access to amenities outside of your condominium’s interior (i.e. fitness centers, recreational rooms, and courtyards). You pay for these privileges beyond the purchase price of your condominium, however, which leads nicely into the next point.
Townhouse vs. Condo: Fees
When you own a condominium, it’s not uncommon for you to pay maintenance fees that go towards snow removal, lawn mowing, and maintenance of those aforementioned amenities. These costs can be quite high; in Toronto, they average about 65 cents per square foot. You’d never spend anywhere near that much on maintaining your own townhome but it’s the price of living in a condo.
Some townhomes do come with homeowners association (HOA) fees but these are typically much lower than condominium maintenance fees since, again, individual dwelling owners will typically handle the bulk of the work.
Condo Townhouse vs. Freehold Townhouse
If you have to pay homeowner’s association dues for a townhouse, there’s a decent chance it’s actually what’s known as a condo townhouse. Legally, these properties have more in common with condominiums in that residents are responsible for their individual units while a centralized authority handles maintenance of common outdoor areas.
This differs from a freehold townhouse, which is what people usually think of when they refer to townhomes. With these properties, you own and are responsible for the dwelling as well as the land it sits on.
Condo vs. Townhouse for Investment Purposes
Buying a home is about much more than just putting a roof over your family’s head. It’s also among the biggest investments most people make in their lives, amounting to hundreds of thousands of dollars.
So what’s a better investment – a condominium or a townhouse?
Townhomes in places like Brampton generally win out in our opinion. For one, a larger portion of your monthly payment goes towards building equity for yourself (learn more about what that means in our post on renting vs. buying).
While condo maintenance fees do offer convenience, that money is basically gone once you hand it over. As many condo owners were horrified to discover during the COVID-19 pandemic, fees such as those offering pool access still had to be paid even as facilities were closed.
With condominiums, you also suffer from a lack of control. There’s only so much you can do if other tenants (or the condominium corporation) neglect upkeep. If the entire building’s reputation falters as a result, your investment will lose value.
With townhouses, on the other hand, prospective buyers will primarily pay attention to your property and those immediately adjacent to it. You’d have a much easier time convincing two neighbors to get their act together than arguing with hundreds of fellow condominium residents.
There are, of course, people for whom condos win out the ‘condo vs. townhouse for investment’ debate. If you’re looking to own multiple properties and don’t have the bandwidth to keep their exteriors looking pristine, paying condo maintenance fees can be economical.
Condo vs. Townhouse: Pros and Cons
Now that you know the difference between these two types of dwellings, let’s look at the condo vs. townhouse pros and cons.
Condominium valuations tend to be much more reasonable than that of houses, at least in the big city. This makes them more accessible for single adults and others who don’t have the millions of dollars typically needed to purchase a detached home.
Con: Lack of Control
It’s not uncommon for condo owners to have complaints about how their maintenance fees are being allocated and used. This can be particularly frustrating when management companies raise fees drastically to cover expenses you assumed were already being budgeted for.
You, unfortunately, have little recourse in these situations and have to keep paying fees. Otherwise, you can be evicted and have your condo liquidated to make up for unpaid dues. You read that right – even when you own your condominium, that can happen!
Pro: Less Maintenance to Worry About
Many people don’t have any issues with paying someone to handle property maintenance. Young professionals and busy families may simply not have time for upkeep.
Con: Lack of Privacy
In a condominium, you’re typically surrounded on all sides by other tenants. This can get pretty annoying if you have noisy (or nosey) neighbors. Even if you have respectful neighbors, you’ll still hear a lot more of what goes on around you than you’d experience in a house.
Condominiums, especially in cities like Toronto, tend to be located right at the center of the action. Networks like the PATH mean you can get around the city without ever setting foot outdoors – something you’ll find quite handy in winter.
Con: Condos Can be Harder to Sell
There are many variables that contribute to a condominium’s desirability. Several of these variables are beyond your control. We mentioned the behavior of other tenants earlier but you also need to worry about your condo board’s reputation as well as how many units in your building are being rented out. Higher rates of leasing in your building can deter buyers due to concerns over reputation and cleanliness.
Pro: More Outdoor Space
As we’ve mentioned a few times thus far, townhouses of the freehold variety typically come with ownership of outdoor living spaces (i.e. your lawn and backyard). As such, you can enjoy barbecues and other private functions without worrying about fighting other tenants for access to those areas.
Con: You’ll Handle Maintenance Yourself
While centralized boards handle condo maintenance, you’re on your own when it comes to a townhouse. While this does mean you can get it done for less money, you’ll still have to put in the time and effort.
Pro: More Living Space
Condominiums are often derisively referred to as boxes in the sky. It’s not hard to see why since that’s often literally what they are.
Townhouses, on the other hand, are typically much more liveable dwellings, particularly if you have a family. Enjoy more square footage and privacy from those you live with.
Con: Limited Freedom to Renovate
While you can certainly customize your townhouse’s interior to a large degree, your ability to make major modifications will be limited given that you share walls with at least one other homeowner.
Of course, this isn’t unique to townhouses (condos have this limitation as well) but it’s worth pointing out if you’re also open to buying a detached property.
Pro: More Peaceful Location
If you’re looking to raise a family, it’s hard to beat the quieter, more peaceful environment of a townhouse in the suburbs. Your kids will typically enjoy more open space, better schools, and less crime.
Townhome vs. Condo: Conclusion
We hope this article has been useful in helping you decide whether to purchase a condominium or townhome. If you’re looking for a townhouse in the Greater Toronto Area, we invite you to check out our new developments. Enjoy optimally-located and high-quality homes built to last!