Buying a Condominium or a Townhouse, What’s The Difference?

The main difference between condominium and townhouse is ownership and not style.  Condominium ownership is basically from the drywall or paint on the walls in.  Townhouse ownership includes typically exterior walls, roof and a parcel of land.  When investigating tax records, land ownership for condominium will typically have”common” and “townhouse” will have a lot stated, such as 20 x 80.

Does this matter from a home buyers perspective?  Yes it does.  Potential homebuyers should ask several questions before buying.

When purchasing a condominium:

  1. How old and what is the remaining life on major repair items such as roof, siding and common amenities.
  2. Are there adequate reserves for replacement.  Read a great article on how to know if reserves are adequate at  http://www.condoassociation.com/blog/tabid/19257/bid/3826/How-Much-Money...
  3. If the reserves are not adequate, a special assessment will increase the monthly fee for the homeowner.  This is a temporary assessment for a couple of months or it could be years.  A typical “special assessment” in the northeast, is if a snow season was especially extreme and the plows were running more than budgeted.  This special assessment would be shorter, usually 3-6 months.   A more expensive example would be if the siding and roofs needed replacement.  There would be a higher and longer special assessment.  If this assessment is over years, it can place downward pressure on market values and marketing times.

hen purchasing a townhouse:

  1. First find out what you as the homeowner are responsible for.  This can vary between developments.  If you are responsible for the roof, siding and windows, remember to budget yourself for replacements based on what you and your home inspector judge the remaining life will be.
  2. From a future marketing perspective, check to see when replacement or updating of exterior items is needed.  Is the type of material, quality and color restricted?  I think, the greater the restrictions, the better for future marketability.  Although I like the color fuchsia, I don’t think I want my house color of Santa Fe brown next to my fuchsia neighbor.  The more consistent a development is over time, the better this is for market values.
  3. Check the neighbors yards.  Typically the use of the land in front and in back of the home is not restricted and can be used for the owners own use.  There can be gardens, sheds, flower beds, fences and other items (sometimes not eye appealing).  Again check to see if there are restrictions and observe overall maintenance.  As I said before, the greater the restrictions and enforcement of the rules and regulations, the better for future market values.
  4. Usually the monthly association fees will be less in townhouse ownership since the owners are responsible for more of the exterior maintenance.

Is there a difference in market value between condo’s and townhouse’s.  No, it is very difficult to tell simply by looking at two homes the form of ownership. Lets say both homes are two-story and attached.  Are they condominium or townhouse ownership?  The difference in market values will be based on the developments themselves not the form of ownership.  One development may have greater architectural detail, larger homes, newer in age, more amenities or be better managed.

When buying a home, whether it is a condominium or a townhouse, first confirm what type of ownership it is and then do your research.  A couple of hours gathering facts will go a long way towards your future happiness and getting the best return when you sell your home.

Suburban Realty Professionals  ♦  Princeton Office  ♦  96 Wall Street  ♦  Princeton, NJ 08540  ♦  877-221-8787