One of the biggest financial decisions people make in their lives is when they decide to become a homeowner. For many, particularly in more urban environments, the choice becomes one of investing in a condo or a townhouse. The differences between the two types of residential property can be very important and have a big impact on your decision of condo vs. townhouse.

Condo

A condo is typically a unit in a far longer complex, often multi-floored, with shared common areas. Common areas can include hallways, elevators, gym areas, and other places where all residents have access. When buying a condo you're effectively buying everything inside the walls of your condo, while everything outside is shared and managed by a group of owners. You don't actually own any land in a condo purchase.

Each resident has to pay fees to the Home Owners Association (HOA) that maintains the shared facilities and general upkeep of the condo complex. These fees are typically higher than in a townhouse or other residential arrangement as there are so many areas deemed to be shared that need to be maintained, i.e. elevators, gyms, and pools.

One key reason many individuals purchase condos is the increased security provided, as many employ security doormen or at the very least have restricted access to the building. This comes at the cost of privacy as most of your walls are shared with neighbors, as well as your floor and ceiling. You're far more likely to hear your neighbors in a condo than in other residential options.

Condos are often far more regulated than townhouses or homes in terms of both government and HOA regulation. Governments will often place rules guiding the legal status of homeowners, and HOA's can dictate everything from Christmas lights to how to dispose of your garbage.

Townhouse

A townhouse is an attached home, often in a community or complex of other townhouses, where there may also be some shared common areas. When you buy a townhouse you are buying the land it sits on and also any garden or yard areas that are attached to your unit.

Many townhouse communities do come with HOA fees, but these are typically far lower than for condos as the general maintenance of the community is cheaper. The maintenance can be as limited as a few gardeners or shared garbage pickup, or as extensive as having a shared gym and pool facility. While this cost is lower the costs to maintain your unit can outweigh these savings if you have something major come up in terms of home repairs.
While you will typically share your side walls with neighbors (unless you have an end unit) you do have more privacy than in a condo. This does come with lower security as effectively anyone can walk up to your front door without being questions or having their access limited.

Condo vs. Townhouse

Often the condo vs. townhouse decision comes down to cost, with a townhouse being more expensive than a condo in the same neighborhood. They are typically larger and the added privacy and yard space are big selling points for many families. That said there can be clear reasons to prefer condos as they come with higher security and often have far better facilities, i.e. gyms and pools. The decision may not always be a cost one and can easily come down to a buyer's personal preference. The above differences will help you know whether a condo vs. a townhouse will work better for you.