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What's the Difference Between a Townhome and a Condo?

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a row of townhomes

When you’re in the market for a home, townhomes and condos can be appealing. They offer the allure of limited exterior maintenance, active homeowners associations, and sometimes a lower-cost way to buy a home. Though many people use the terms townhome and condo interchangeably, there are some key differences to understand before you buy. So let’s break it down and take a deep dive into this popular side of real estate. 


a building with several condos


Think of a condo as being like an apartment that you own – in fact, some condos are apartments. Condos can come in a variety of shapes and sizes, and can be apartment-style, with multiple floors of units in the same building. 

The important thing to know is that when you buy a condo, you own only the interior of your space. The exterior and the land belongs to a community organization (likely a homeowner’s association), so they’re responsible for exterior maintenance, like landscaping, snow shoveling and management of shared spaces. Depending on the condo, community spaces may include extra amenities like a gym, pool, and parks or trails. 

Because of the larger role HOAs have on the property, association fees and dues are typically higher than with a townhome. Condos can make financing more challenging in some cases, especially if you’re getting an FHA loan (this loan has stricter rules for condos than single-family homes). So it’s a good idea to talk to a mortgage lender early on in the process to understand your options. 


a row of townhomes


Unlike a condo, with a townhome, you own the land that your home stands on. This means that exterior maintenance and caretaking of the land falls on you, unless your HOA has a different agreement. That said, owning the land generally comes with more freedom. Don’t love the current landscaping in your yard? You can change it up. Plus, your HOA dues will likely be lower, freeing up funds to do your own exterior maintenance as you wish.

Townhomes usually only have neighbors on either side, rather than above or below like an apartment or some types of condos. Townhomes do typically still share at least one wall with another unit, which means that shared walls and fences come with an easement that limits what you can do to them. For instance, you couldn’t smash a hole through a shared wall without permission, because that would impact the neighbor’s dwelling too. 

There can be quite a bit of overlap between condos and townhomes depending on the community they’re a part of. The important thing is that you ask about these differences early on when looking at a place to buy. Start by asking the owner for a copy of the HOA covenants, which will answer many questions for you.


a couple holding keys to their new home

Which should you go with – a townhome or a condo?

Ultimately, the choice between a condo and a townhome comes down to your personal preference. The state of the housing market may also determine the best choice. 

Since townhomes include the land they’re built on, financing is more straightforward. That can make them easier to sell when the time comes, but again, that all depends on the market. Condos’ low-maintenance vibe can be a big draw for some buyers, especially if you’re not living in it full-time. Winter’s no worry if snow removal is taken care of. Mainly, it pays to dive deep into the covenants, conditions and restrictions of the neighborhood, because you might find a townhome with some of the same perks of condos, and vice versa. 

When the time comes to take the plunge into purchasing, Rocky Mountain Credit Union is here to help you navigate the Montana real estate martet. Our local mortgage lenders can help you sort out the ins and outs of financing to find the place that feels like home. Get in touch when you’re ready to turn the key. 


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