House, Condo, or Townhome?

Association Fees

When you buy a townhome or condo, you’ll become part of a Common Interest Community that requires monthly fees in order to share the responsibilities and upkeep that comes with membership. These usually include: trash removal, outdoor maintenance, lawn care, snow removal, water/sewer, and sometimes hazard insurance. Depending on how high the fee is, condo association fees may also include: electric, cable, heat and air conditioning, security, and shared amenities.

Condo or townhome associations are managed either by an outside company, or elected community members. When considering buying either type of property, keep in mind there will be association-imposed restrictions. Make sure to find out ahead of time if there are any pet restrictions, plans for major improvements, parking rules, or balcony use. One reason many decide against a condo or townhome is that owners have very little control over unforeseen repair fees that aren’t covered by reserve association funds, or annual fee increases.

 

Finances

Although townhomes and condos usually cost significantly less than houses, there are also higher interest rates involved in the purchase, and lenders often base their decisions on the financial health of the condo or townhome association.

However, when buying a house, your maximum monthly mortgage payment does not include utilities or maintenance—while condo and townhome mortgages usually cover some or all of the association fees, which include utilities and maintenance.

It’s also worth keeping in mind the fact that association fees are not tax deductible. While homeowners do not have the responsibility of paying association fees, there are also regular upkeep fees to be considered.

 

Lifestyle Priorities

If you travel regularly and frequently, home maintenance may not be something you’re able to put a lot of time into. That’s one of the biggest reasons people choose condos or townhomes, because of all the services typically provided by the building association.

Those who value having more space and a private yard or garden may choose buying a home, as it allows for more control and privacy.

Young professionals often choose condos or townhomes because they don’t feel the need to have and take care of a yard—and especially because these types of homes often place them closer to public transportation, shops, and restaurants.

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