If you’re in the market to buy, the choice could boil down to a condo or a duplex. Someone who would enjoy condo living — communal, with amenities — wouldn’t necessarily savor duplex living, and vice versa.
The financing can be different. Fees differ.
Let’s look at the main differences between these different types of houses.
What Is a Condo?
First, let’s focus on what a condo is. Short for condominium, a condo is a single, privately owned unit that’s part of a community of these units. They can be combined in a building or built as detached structures.
A condo is often a good starter home.
It also can be a good choice for a first-time homebuyer, who technically is someone who hasn’t owned a primary home in three years.
Overseen by a homeowners association (HOA), condo owners have an interest in common areas, from lobbies and hallways to gyms and pools. A purchaser of a unit owns the condo’s interior.
First-time homebuyers can
prequalify for a SoFi mortgage loan,
with as little as 3% down.
Recommended: Buying a Condo: 8 Things To Do
Pros and Cons of Living in a Condo
When considering a condo, here are pros and cons to ponder.
| Pros | Cons |
|---|---|
| Condos are usually more affordable than single-family homes. | You’ll need to pay HOA fees and follow the community’s rules. Over time, HOA fees can increase, and special assessments can occur. |
| You can enjoy community amenities with costs shared by all owners; the community may also host social events. | Privacy can be at a premium. Shared spaces can be noisy and you may see more of your neighbors than you’d like. Some of them might entertain frequently, have work hours opposite yours, and so forth. |
| The outdoor maintenance is handled by the HOA. | Green space is often limited. So, if you enjoy spending time outdoors by your home, this may not work well for you. |
| Security, from gates to security staff, may be provided. | If another owner in the condo community sells at a lower price or is foreclosed on, this can affect the value of your unit. |
What Is a Duplex?
A duplex is a multifamily home with two units, each with its own entrance. Sometimes a duplex has two units that are side by side, Sometimes one unit is downstairs and the other upstairs. In that case, outside stairs can lead to the second-story unit.
You may decide to buy a duplex, live in half, and rent out the other half for income — or rent both halves.
Pros and Cons of Living in a Duplex
When considering a duplex, here are pros and cons to consider.
| Pros | Cons |
|---|---|
| A duplex tends to be more affordable than a single-family structure. | A duplex isn’t as private as a single-family home and you may hear noise. You’ll also share the driveway and yard. |
| Buying a duplex allows you to buy a home and get help paying for the mortgage. | You are now a landlord with all of the responsibilities that entails. |
| Tax write-offs may exist. | If you don’t have a tenant or the tenant falls behind on rent, you still owe your mortgage payment. |
What Is the Difference Between a Condo and a Duplex?
If you found a sweet condo and a duplex with potential, it might pose a dilemma. Here’s more info to inform a decision.
Financing
Homes with up to four units are considered residential, so if you plan to occupy one of the units of a duplex, you’re looking at the same types of mortgage loans you would with a single-family home.
A condo buyer will enjoy the same kind of financing that is available to buyers of single-family homes but will face extra steps and slightly higher interest rates. Financing a condo vs. townhouse, for example, involves a lender review of the condo community or inclusion on a list of approved condominium communities.
Cost
A condo may cost less than a duplex, but it will come with HOA fees. Prices can vary considerably based on the location, size, and condition of a property.
Insurance rates can be higher for a duplex because the entire structure needs to be covered. Rates can be more affordable for a condo owner, who is responsible for the interior of their unit only.
Ownership
With a condo, you’d own the interior of your unit, with common areas owned by the HOA. With a duplex, you’d own the entire structure, which includes the lot it’s built on.
Responsibilities
Duplex owners take on all of the typical homeowner responsibilities.The HOA handles maintenance and repairs for condo owners.
Common Areas
Condo owners can use common areas and amenities, which can include a clubhouse, pool, park, and gym.
If you buy a duplex, people living in both units share the yard, with the owner responsible for its maintenance.
The Exterior
As the owner of a duplex, you’re responsible for the entire property.
At a condo complex, the HOA takes care of common areas, including the building exteriors.
Resale Value
Condos tend to appreciate in value, although not as quickly as single-family homes do.
Duplexes also tend to because of the rent received and the lack of HOA fees.
Condo vs Duplex: The Verdict
If you like the idea of less maintenance and think that HOA fees are worth what you get in return, you would enjoy the community’s amenities, and you’re fine with less green space, then a condo may make sense for you.
If you don’t want to pay HOA fees (and may not use amenities anyway) and believe that having a yard and more control over what you do with your property is a real plus, a duplex may be a better choice.
The Takeaway
When house hunting, two options may include a condo and a duplex. Each has benefits as well as challenges, which should be explored before you make a financial investment in a property.
3 Home Loan Tips
- To see a house in person, particularly in a tight or expensive market, you may need to show proof of pre-qualification to the real estate agent. With SoFi’s online application, it can take just minutes to get pre-qualified.
- Not to be confused with pre-qualification, pre-approval involves a longer application, documentation, and hard credit pulls. Ideally, you want to keep your applications for pre-approval to within the same 14- to 45-day period, since many hard credit pulls outside the given time period can adversely affect your credit score, which in turn affects the mortgage terms you’ll be offered.
- Thinking of using a mortgage broker? That person will try to help you save money by finding the best loan offers you are eligible for. But if you deal directly with a mortgage lender, you won’t have to pay a mortgage broker’s commission, which is usually based on the mortgage amount.
FAQ
Is a condo the same as a duplex?
No. A duplex is a detached home that’s divided in half (side by side or up and down) for two sets of residents, while a condo is a single unit within a condominium community.
Which is better: a duplex or a condo?
It depends upon your preferences and lifestyle.
Is living in a duplex noisy?
It could be! You’ll either have a shared wall or a shared ceiling/floor with someone else. So if the residents in the other half have a rambunctious lifestyle, it could get noisy.
Are duplexes cheaper than condos?
In general, a condo may be cheaper than a duplex, but location, size, and condition affect the values.
Photo credit: iStock/william87
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