House or Condo? 5 Differences to Consider Before Buying Your Next Home

Difference #1: Cost

Condos are generally less costly than single-family houses in the same area and therefore allow you to get into the property market sooner. And, because condos are typically less expensive, your property tax bill (which is calculated in part based on your home’s assessed value) will be lower compared to that of a home in the same municipality.

Further, you'll pay less for condo owner insurance versus homeowner insurance because you are only responsible for protecting a portion of the building, not the whole thing. Your property management company typically insures the common areas, the exterior of the building (such as the roof), parking garages and more, while your policy only needs to cover your unit and your possessions within it.

Keep in mind, however, that condo owners are also responsible for paying maintenance fees – or condo fees – which are monthly expenses that help the building pay for expenses throughout the year. Condo fees typically cover utilities, building insurance, the maintenance of common elements, and the reserve fund – a pool of money that the condo building sets aside for major expenses beyond day-to-day maintenance. These fees are often related to the square footage of the unit, the age of the property and the amenities it offers.

Difference # 2: Home Maintenance

One of the primary reasons homebuyers will choose a condo over a house is the time, cost, and effort that goes into maintaining each type of residence. If you’re the type of person who prefers the convenience of picking up the phone to report any maintenance issues – and would like to avoid the responsibilities and costs that come with maintaining a property – a condo may be the right choice for you. If you’re handy and enjoy working around the house, however, maintenance may not be an issue and, therefore, not a consideration as you work through your homebuying decision.

Difference #3: Security

If you travel a lot or live on your own, security may be top of mind. Generally, an apartment-style condo is more secure than a free-standing house, as many buildings come with a concierge or security guard who monitors the people who come and go. Plus, all modern condos will have entry control systems which require a key or key fob to unlock the front door, limiting access inside.

Difference #4: Investment Opportunities

If you’re looking to buy a home as an investment opportunity, there are a few things to consider. While condos are typically cheaper to buy and maintain, single-family houses appreciate faster than condos do. A condo will be an easier, low-maintenance option that can essentially allow you to park your money while the unit appreciates over time. A house, meanwhile, which will come with higher maintenance, insurance, and tax expenses, will be more work but yield a greater payoff down the road.

The option you choose will come down to the amount you’re prepared to invest in real estate, your capacity for maintenance, your time horizon, and your tolerance for risk.

Difference #5: Lifestyle

When it comes to deciding between buying a house or a condo, it really boils down to how you want to live. What are your priorities? Are convenience and location important to you? Or do you place a high value on privacy and space?

With a condo, you may have more flexibility on where you live, given the lower cost and prevalence of condo buildings in both urban and suburban areas. And the low-maintenance lifestyle condo living affords is a game-changer for many buyers.

With a house, you can enjoy more privacy and personal freedom, particularly when it comes to the décor, structure, and style of your home. While many condo buildings require special permission to take on interior upgrades (such as new flooring, cabinets, or counters), you have no such restrictions with a house. Having a yard, garden, and more living space inside is also highly appealing to many buyers, so if these are important to you, you may lean toward a house.