Are you ready to buy your first piece of real estate? Before you buy, you may want to understand the pros and cons of a single-family home versus a condominium (condo) versus a townhome. To help you decide which piece of real estate is best for you, let’s define each one.
What Is a Single-Family Home?
This style is a freestanding residential building on a plot of land that one family owns and typically resides in. A single-family home features a private entrance and exclusive use of the property. This type of dwelling has its own heating, air conditioning, and utilities and doesn’t share the cost of utilities with another dwelling.
Kris Farwell, Director of Mortgage, says, “Single-family homes offer a variety of floor plans. Some homes have larger kitchens, more bedrooms or bathrooms, open spaces, basements for storage, and lot sizes that vary.” She says smaller lots may mean your neighbors are closer in proximity, while larger plots of land mean a bit more space between you and the home next to you.
This type of home allows you to modify the space. You can build an addition or remove non-load-bearing walls. She says, “Some people choose to purchase single-family homes that need renovation. Then, you have the opportunity to be creative and select paint colors, flooring, light fixtures, faucets, and more.” Some people choose to enjoy the results of the renovations or resell the property for a profit.
Farwell says, “It’s important to remember when you own a single-family home, you are responsible for all repairs, lawn care, and yard work. If your neighborhood has an HOA fee, it’s often for community amenities (pool, main entry landscaping, etc.) but not for your individual property maintenance.
What Is a Townhouse?
Townhomes are dwellings that are attached to other townhomes, with each having at least one shared wall with adjacent townhomes. They are also located in more urban areas. Farwell says, “Townhomes are great for active people who are on the go. Many, but not all, townhouses are a part of an HOA. You pay an HOA fee to have the owner of the property maintain the structure and the lawn.” HOA fees usually cover maintenance, repairs, utilities, insurance, administrative costs, pest control, and even fun community events. This type of dwelling is often more affordable than a single-family home, but you may not have the freedom to customize the space.
What Is a Condominium?
A condo and a townhouse are very similar. They are often connected via one or two walls and are governed by an association similar to an HOA. A condo is a single unit that makes up a larger complex. Purchasing a condo combines personal ownership with community living. You own the walls, floors, and ceiling, along with shared ownership of the common areas that usually include pools, gyms, lobbies, parking garages, etc. This is a great way to enhance your lifestyle without all the maintenance responsibilities. “If you choose to live in a condo, pay particular attention to covenants, conditions, and restrictions (CC&Rs), which are legally binding rules that govern how a property can be used in a community. This ensures that the community looks well maintained and is safe,” says Farwell.
Because you pay an HOA fee to live in a condo, it’s important to understand what an HOA fee includes. This fee covers the cost of maintaining the common areas, the building, and other services provided by the association. “This fee varies; however it’s an important factor in your monthly payment,” she says. Therefore, you are responsible for insuring the contents of your unit, and the HOA payment insures the building.
Purchasing real estate is a significant life decision that requires careful thought and planning. Before making this investment, assess your current and future housing needs to determine the best option for you. Whether you're considering a townhome, a single-family house, or a condo, each has unique benefits and challenges. Talk with a realtor and Coulee Bank mortgage loan officer today so you can find the property of your dreams.