Townhouse vs Apartment: A Homebuyer’s Guide
When looking for a property to buy, you might consider a single-family detached home, a townhouse, a condo, a co-op apartment, or something else.
Let’s look at the pros and cons of buying a townhouse vs. a condo.
Key Points
• Townhouses tend to offer more control over the exterior and land use compared to apartments.
• Townhouse HOA fees are generally lower, covering fewer amenities.
• Financing a townhouse is similar to a single-family home, while condos and co-ops often have stricter requirements.
• Apartments or townhouse communities often include amenities like pools and gyms, maintained by the HOA.
• Townhouses may offer more privacy, balancing homeownership and reduced responsibilities.
What Is a Townhouse?
At first glance, a townhouse might look like a typical house, but a closer look will show that it’s attached to at least one similar unit.
Townhouses are often found in urban areas where space is at a premium. They often come with a front or back yard. Owners own the inside and outside of their unit and the land it sits on.
The townhome community may have a homeowners association (HOA) and maintenance fees. You’ll want to make sure you understand the costs of the HOA and its rules before signing a contract and getting a home mortgage loan.
First-time homebuyers can
prequalify for a SoFi mortgage loan,
with as little as 3% down.
Questions? Call (888)-541-0398.
Benefits of Buying a Townhouse
There are at least three upsides to purchasing a townhouse.
Owner Rights
Because people who buy a townhouse own the land it’s on, they have more freedom in how to use the yard. A yard or patio can open possibilities for a grilling spot or dog or child play area.
They also have at least some freedom of choice about the appearance of the inside and outside of the structure, although HOAs may have rules about all of the above.
Price
In communities with high home prices, townhouses may be an affordable alternative for first-time homebuyers.
House hunters from millennial homebuyers to empty-nesters may also find a townhouse a sweet spot between a condo and a traditional detached home with yard.
Plus, because lots tend to be smaller than ones with detached homes on them, property taxes are usually lower as well.
Low Maintenance
Smaller yards mean less yardwork, ideal for busy people and those who are downsizing their home and responsibilities.
The townhouse complex may be gated and have security, and some have pools, gyms, and other shared recreational spaces whose maintenance is covered by homeowner fees.
Disadvantages of Buying a Townhouse
When you think of townhouse living, keep in mind the close quarters with neighbors and possible HOA fees and rules.
HOA
Townhouse communities are less likely to have an HOA than condominiums are, but if they do, the resident-led board will collect ongoing fees to cover common areas and any community perks such as a pool. The HOA will also enforce community rules.
Lack of Privacy
Because of the shared walls, a townhouse provides less privacy than a detached home (although it may offer more privacy than many condo buildings, where you may have a unit above and below yours). Townhouse living may therefore create some challenges for families with young children.
What Is an Apartment?
An apartment is a room or set of rooms within a building. In major cities, some people refer to buying a condo or co-op shares as buying an apartment.
Condo owners own everything within their unit and have an interest in the common elements. “Buying a co-op apartment” really means holding shares in the housing cooperative that owns the property.
Then there are people and companies that buy a multifamily property like an apartment building and rent out the units. An owner could decide to live in one of the units and serve as an on-site landlord.
Get matched with a local
real estate agent and earn up to
$9,500‡ cash back when you close.
Pair up with a local real estate agent through HomeStory and unlock up to
$9,500 cash back at closing.‡ Average cash back received is $1,700.
Benefits of Living in an Apartment
Let’s look at some benefits of buying a condo or a co-op.
Low Maintenance
You won’t typically need to make many repairs, mow the grass, or paint. That’s covered by the monthly or quarterly fees you’ll pay.
Low Utilities
First, condos tend to be smaller than single-family homes, which can reduce the cost of heating and cooling the space, and take less electricity to keep it well lit.
HOA
If the building has an HOA (which may be called a condo or co-op association), the association will take care of property maintenance and enforcement of rules.
Disadvantages of Living in an Apartment
Apartment life can come with disadvantages, too. Here are a few.
Parking
You may or may not have a parking space set aside for you, and street parking isn’t always a given in busy locales. Even if you have a parking spot, if people come to visit, they may not easily find anywhere to park.
Noisy or Nosy Neighbors
If you appreciate quiet calmness, you may not find all you’d like in condo living. Neighbors are nearby and they can be noisy. If you’re in a crowded city, surrounding events can contribute to the jostling and noise.
Limited Space
If you’re used to living in a house, you could find a more compact apartment to be challenging as you try to fit in your belongings. Plus, apartments often lack yard space or a patio, which further limits the amount of space you have to use and enjoy.
Differences Between a Townhouse and an Apartment
When comparing apartment or condo vs. townhouse, keep in mind these differences.
| Townhouse | Apartment/Condo |
|---|---|
| Single-family unit that shares one or more walls with another home | Room or rooms within a building |
| May have a small yard or patio | May be less likely to have outdoor space |
| Gives owner some control over how to change the exterior and use yard | Any exterior space is often shared and cared for by HOA |
| Can be more affordable than traditional detached homes in markets with high prices | Can also be more affordable than traditional detached homes |
| If there’s an HOA, fees are usually lower because owners are responsible for much of their own upkeep | If an HOA is in place, it will collect fees to cover most maintenance and condo fees can be higher than those for townhouses. |
| May not provide as much privacy as a freestanding house | May not provide as much privacy as a freestanding house |
| Thanks to the land ownership, financing is similar to a traditional mortgage | It can be harder to finance a condo than a townhouse |
The Takeaway
Buying a townhouse or an apartment can give you many of the pleasures of homeownership with less of the associated upkeep. But there are unique qualities to each and potential downsides, too. Make sure you understand the role a homeowner’s association might play in any property you purchase before you make an offer and nail down your financing.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.
FAQ
Do townhomes appreciate as much as houses?
In general, townhomes do not appreciate as quickly as single-family detached homes, thanks to the amount of land that comes with traditional stand-alone homes.
Are townhouses a bad investment?
In some circumstances, a townhouse may be a good investment. The price, current market conditions, and location are factors.
Are fees higher for a townhouse or condo?
Condo HOA dues are typically a lot higher than townhouse fees (if the townhouse community even has an HOA). Condo communities usually have many more amenities to maintain.
Photo credit: iStock/Auseklis
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
Qualifying for the reward requires using a real estate agent that participates in HomeStory’s broker to broker agreement to complete the real estate buy and/or sell transaction. You retain the right to negotiate buyer and or seller representation agreements. Upon successful close of the transaction, the Real Estate Agent pays a fee to HomeStory Real Estate Services. All Agents have been independently vetted by HomeStory to meet performance expectations required to participate in the program. If you are currently working with a REALTOR®, please disregard this notice. It is not our intention to solicit the offerings of other REALTORS®. A reward is not available where prohibited by state law, including Alaska, Iowa, Louisiana and Missouri. A reduced agent commission may be available for sellers in lieu of the reward in Mississippi, New Jersey, Oklahoma, and Oregon and should be discussed with the agent upon enrollment. No reward will be available for buyers in Mississippi, Oklahoma, and Oregon. A commission credit may be available for buyers in lieu of the reward in New Jersey and must be discussed with the agent upon enrollment and included in a Buyer Agency Agreement with Rebate Provision. Rewards in Kansas and Tennessee are required to be delivered by gift card.
HomeStory will issue the reward using the payment option you select and will be sent to the client enrolled in the program within 45 days of HomeStory Real Estate Services receipt of settlement statements and any other documentation reasonably required to calculate the applicable reward amount. Real estate agent fees and commissions still apply. Short sale transactions do not qualify for the reward. Depending on state regulations highlighted above, reward amount is based on sale price of the home purchased and/or sold and cannot exceed $9,500 per buy or sell transaction. Employer-sponsored relocations may preclude participation in the reward program offering. SoFi is not responsible for the reward.
SoFi Bank, N.A. (NMLS #696891) does not perform any activity that is or could be construed as unlicensed real estate activity, and SoFi is not licensed as a real estate broker. Agents of SoFi are not authorized to perform real estate activity.
If your property is currently listed with a REALTOR®, please disregard this notice. It is not our intention to solicit the offerings of other REALTORS®.
Reward is valid for 18 months from date of enrollment. After 18 months, you must re-enroll to be eligible for a reward.
SoFi loans subject to credit approval. Offer subject to change or cancellation without notice.
The trademarks, logos and names of other companies, products and services are the property of their respective owners.
SOHL-Q125-023
Read more
