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Condo vs. House: Which Is Right for You?

Updated
Kimberly Rotter, AFC®
Kimberly Rotter, AFC®
| 1 other [ + ]
Ashley Maready
Ashley Maready
Many or all of the products here are from our partners that compensate us. It’s how we make money. But our editorial integrity ensures that our product ratings are not influenced by compensation.

When the time comes to shop for a home, you'll find several property types to choose from. What makes one better than another? Mainly your lifestyle preferences. Here, we'll go over the condo vs. house debate in some detail so you can decide which is right for you.

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What is a condo? What is a house?

Some people use the terms "condo" and "house" interchangeably, but the differences are important. Mainly, with a condo, you share ownership and financial responsibility with others.

Condo definition

A condo is one unit in a multi-dwelling property. Condo owners own the space inside their unit, and they share ownership of common property, such as the building itself and the lot it sits on.

Common property is defined by the bylaws for that particular condo association. For example, in an apartment-style configuration, the condo owner might own the entire wall between the unit and the hallway, half the wall, the drywall on the unit's side of the wall, or only the paint inside the unit.

A condo unit can resemble an apartment or townhouse. Condos are usually attached, which means each unit shares at least one wall with another residence. When people compare condo vs. house, they are usually thinking of a condo as an apartment-style unit and a house as a single-family home with a yard. But the word condominium refers to the legal ownership of the residence, not the architecture. Some condos are single-family detached homes.

House definition

A house is usually a single-family home that doesn't share the property with any other owner or share a wall with any other residence.

There are exceptions, of course. Some houses are built side by side with a shared wall down the middle, on two separately owned properties.

You can rent or own a house. But a homeowner has specific expenses and responsibilities. (More on that below.)

What are the costs associated with a condo vs. house?

In a condo, the homeowners association (HOA) pays some of the costs. When you own a house, you'll foot the bills.

Condo costs

  • HOA dues: HOA fees are a common household expense for condos. They cover expenses like parking, trash, water, and building maintenance -- plus upkeep of shared amenities like the pool and clubhouse. For more on HOA fees and guidelines, check out our homeowners association guide.
  • One-time assessments: Condo owners sometimes pay a one-time assessment fee. Like HOA fees, assessments cover expenses that all of the individual owners are responsible to share. Assessments can cover an unexpected expense (think storm damage to the roof), or an expected expense that's not included in the monthly dues (think 30-year elevator upgrade).
  • Higher purchase cost: Some lenders charge higher mortgage rates for condos. You also might need to make a bigger down payment.

House costs

  • Maintenance: When you own a house, you're responsible for all maintenance. That includes everything from fresh paint to a new water heater.
  • Utilities: You'll pay all the utility bills (like electricity) yourself when you own a house.
  • Landscaping: The exterior condition of the house is the owner's responsibility. If you're not handy with yardwork yourself, you'll have to hire someone and pay them out of your own pocket.
  • Homeowners insurance: Since you're insuring the entire building and property, homeowners insurance for a house usually costs more than a policy for a condo of comparable size and age.
  • HOA fees: You might have to pay HOA fees if you buy a house in a newer development -- even though you're not buying a condo. These fees might pay for pool maintenance for a community pool, maintenance of neighborhood roads, or similar costs. Use a mortgage calculator to make sure your mortgage payment, including HOA fees, is within your budget before you make an offer.

What are the benefits of living in a condo vs. a house?

Condo benefits

  • Someone else is in charge of exterior maintenance
  • Might have more amenities like a pool or fitness center
  • Often priced lower than single-family homes in the area
  • Found in desirable downtown locations

House benefits

  • You get to make remodeling and improvement decisions
  • Usually more space and privacy between neighbors
  • Probably won't have rules, like keeping your balcony clear or parking inside your garage
  • Found in desirable neighborhoods with fewer people

What are the drawbacks of living in a condo vs. house?

Condo drawbacks

  • Tends to be more densely populated
  • You might not agree with how the HOA spends your fees
  • Improvements you can make are generally limited to inside your unit space
  • You'll probably have to abide by rules, even if you don't agree with them

House drawbacks

  • Houses cost a lot more per square foot in some markets
  • Houses and yards are a lot of work to maintain
  • You'll have to manage all improvements yourself
  • There's often nothing you can do about nuisance neighbors

Which is right for me: A condo or a house?

Whether a single-family home or a multi-family building is better comes down to a few basic factors, like maintenance responsibilities, rules, and personal space.

How much responsibility do you want to take on? Do you enjoy mowing the lawn every weekend? Do you want more elbow room? A house might be your style.

Do you want the option to offer your home, or part of it, for rent? A condo might not allow it. Likewise, there could be limitations on whether you can change the outside appearance of your home, including holiday decorations.

If, however, you prefer to sit by a pool that someone else is responsible for cleaning, and you enjoy the social opportunities found in the fitness center, condo living could be for you. Condos are also a better option if you want to live in the heart of a downtown area.

If you're considering a condo, find out what the HOA fees are before you make an offer. Ask your listing agent about a property's HOA fees. Mortgage lenders also want to know about those fees, because they'll factor that expense into your mortgage application.

For more information on owning your own place -- whether it's a house or a condo -- check out Motley Fool Money's Complete Guide to Mortgages to help you make the right decision.

Still have questions?

Here are some other questions we've answered:

FAQs

  • Condos do have resale value, and can sell very quickly in urban areas and cities with higher housing costs. From 2015 to 2020, condo prices in the U.S. rose more than 26%. In the same time period, average house prices rose about 7.5%.

  • The main difference is that the condo will have HOA fees. Mortgage rates also may be higher for a condo than a house, and insurance may cost less.

  • Condos cost less per square foot than a detached house in some areas. But that rule doesn't apply to luxury condos or highly-desirable units.