Condo, Townhome or Single Family…


If you are in the market for a new home, one of your first decisions is whether to buy a single family home or opt instead for townhome or a condo. Single family homes offer more privacy and property than townhomes which are similar but share a wall with one or more other units.  In most cases, when you buy either of these types of homes you also own the property it sits on and are responsible for exterior maintenance. 

Condos, on the other hand, are often (but not always) apartments in a multi-family building or buildings. The term condo actually describes a type of ownership rather than a type of home. When you purchase one, you own your living space plus you and your fellow owners have an undivided interest in anything outside of your individual units such as the property, the roof, the hallways or entries.  There are condo projects where the living units are detached and others which are townhome style, but regardless, if the exteriors and the property are owned in common, according to the deed, they are condos. This means a condo is not technically an apartment, although in our area you will find that is frequently the case. 
Each of these housing styles has advantages and disadvantages and whether or not one is right for you depends on your finances, your preferences, and the stage of your life.  Young executives and retirees with no time or inclination for exterior duties like lawn care may find condos attractive, although townhomes may also appeal to those who want some but not a lot of yardwork. Families, or others with a strong desire for privacy, may find that a single family home is best.  Price is, of course, a big issue and in general condos are the least expensive, followed by towhomes and single family.
Condos and Townhomes, Similar but Different
Just about everyone agrees that one of the biggest benefits of owning a condo is that it is maintenance free.  All condo projects have a Home Owners Association (HOA) to which owners must pay regular fees.  The money pays for upkeep of areas outside the living units such as exteriors (including in some cases doors and windows), the roof, the property on which the building sits and any common areas such as walkways, parking lots, hallways, entries, pools or workout facilities.  
If you are someone who works many hours and spends little time at home, a condo may be just the thing. When you have to go in to work on a Saturday or Sunday or if you decide you’d like to go on a weekend trip, you don’t have to worry about finding someone else to mow your lawn, clean your gutters or trim your shrubs.  If the roof leaks, you don’t have to interview subcontractors, negotiate prices and wait for them to show up on the day they promise to start work.
A condo may also be a good choice for someone who is not handy. Tom Bibb, a REALTOR® with Better Homes and Gardens Real Estate III, described one of his condo buyers, an individual who “just wouldn’t have a clue about how to fix something.”  For this person a condo was perfect. 
Bibb explained that condos also work well for older people who may be handy, but may no longer be willing to climb ladders or  have the desire to do landscaping chores or put in a garden. In addition, the fact that most condos are all on one level can be a real plus for people with aging backs and knees. 
Townhomes, on the other hand, usually have at least two stories, sometimes more, so may appeal to  younger people.  While most have an HOA to manage shared elements, such as parking lots and other amenities, unless the deed says they are condos,  townhome owners are  responsible for exterior maintenance. 
However,  depending on the community, the HOA may assume some of the homeowner responsibilities.  For example, Justin Kent, a REALTOR® with Better Homes and Gardens Real Estate III, who represents Craig Builders, explained that in Old Trail the HOA manages all of the exterior landscaping for townhomes while in the Village at Highlands it takes care of exterior maintenance as well.
Association Fees
Condos come with  fees to pay for HOA services and these can increase over time.  In addition,  there may be special assessments if there is a big repair.  Alex Ix, a REALTOR® with Roy Wheeler Realty Co., suggests that in the long run these fees might be cheaper than doing your own maintenance and yard work.  “When you move into a condo,” he said, “everything is taken care of.  There is no outside maintenance, no shoveling, no raking leaves, no lawn mowing.  All you have to do is walk your dog.” 
Townhome owners also pay association fees, but these may be less than for a condo depending on the Association’s responsibilities. If the HOA does not manage exterior maintenance, there is also less chance of a big jump in fees to pay for an unexpected repair in the roof over someone else’s unit. On the other hand, if your unit has a problem, you would bear the entire cost. If you are considering a condo or a townhome, be sure to find out how much the monthly fees are and what they cover. If you are someone who enjoys doing a little landscaping and the HOA has that responsibility, find out if you have the option of doing any of it yourself.
If a condo or townhome is in a subdivision with an HOA, expect to pay two sets of fees. Rod Phillips, a REALTOR® with Roy Wheeler-Wintergreen Resort Premier Properties, explained that at Wintergreen condo owners pay the fee for their particular project as well as the master HOA fee. In Old Trail, Kent said townhome owners pay just one fee, but it is higher for them than it is for single family home owners.
In Wintergreen, the condo fees pay for maintenance of the exterior and common areas, as well as amenities such as cable and firewood. The master fee pays for Wintergreen community road maintenance, including snow clearing and landscaping of the subdivision entrances and median strips, as well as care of its many green areas and walking trails.
Single family home owners in the same community mow their own lawns but only pay the main Association fee.
A Great Second Home
For many, condos make an affordable second home. Phillips and his family have one in Wintergreen which, he says, “has a special place in my heart.” He has condo clients who agree with him and come from Northern Virginia and DC as well as Richmond, Tidewater and Charlottesville and from as far away as Charlotte and the Raleigh/Durham in North Carolina.
The combination of price plus spectacular scenery, skiing and golf plus maintenance free living makes these units hard to beat.
Long distance commuters also favor condo living for many of the same reasons.  Ix referenced an attorney client whose main residence is in DC but purchased a condo when his Charlottesville practice expanded and he was tired of  staying in hotels.
He described other clients who own property in surrounding counties and work in Charlottesville who tired of the daily commute. Many of these individuals don’t want to sell the family home or farm, so they buy a condo near where they work.  They stay there during the week and continue to enjoy their other property on their days off.  Others choose the convenience of a condo  for a place to stay after football games or other big events.  “The price of gas is a factor for a lot of these people,” Ix said. Townhomes are also an option but may have less appeal for commuters since they generally cost more and may require more work.
Both condos and townhomes offer a sense of security since neighbors are so close.  This may be somewhat less for townhomes whose front entrances open directly onto the street.  Most apartment style condo buildings have a main entry which may provide an additional sense of security. 
Regardless of which type of property you choose, check with your lender first.  This is especially true in the case of condos where lenders may be much stricter than when underwriting loans for single family homes or townhomes. 
Ann Totty, a loan officer wtih New American Mortgage, explained that FHA as well as Fannie Mae and Freddie Mac all maintain lists of approved condo projects, which can be viewed on their websites.  If you find a condo you like and it’s not on the approved list, you won’t  be able to obtain one of these loans.  
Whether or not a project is on the approved lists depends in large part on the number of investor owned units.  The more rental units in a project, the less likely it is to be on the list.
Since this number can change, the lists expire and projects have to be reevaluated, and reapproved on a regular basis.
Other loans may be available for condo purchase but may require a down payment of 20 percent or more as well as squeaky clean credit.  Despite their similarities, townhome developments, unless they are also condos, do not have the same restrictions. This may make them more accessible to first time buyers who often don’t have the funds for a large down payment.
A related consideration is that  a condo unit may be designated by deed as owner occupied, meaning  it can never be a rental unit. Bibb has clients who purchased a condo for their daughter when she was a student.  Although she has graduated, her parents have been unable to sell the unit, and because it is designated as owner occupied, it can’t be rented.  This means if your plans include purchasing a condo with the possibility of some day becoming a landlord, you may want to consider a townhome instead.
Condos and Townhomes as Stepping Stones
For individuals purchasing their first home, a condo or townhome offers an opportunity to develop equity towards a single family home. Bibb said that in general condos appreciate less than townhomes, which appreciate less than a single family homes. However, even if there is little or no equity at sale time, purchasing one of these units may still be a good plan.  He explained that monthly payments, especially on many condos, are about the same as rent.  “Even if you just break even,” he said, “when you sell, you’ve still lived there for free.” 
Celeste Smucker is a writer, editor and author of Sold on Me, Daily Inspiration for Real Estate Agents.  She lives near Charlottesville.