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Buying a home is a major financial decision, and one of the first steps in the process is deciding which type of home to buy. For instance, should you purchase a condominium or a single-family house?
If you have a big family, you might be willing to pay more for a single-family home because it tends to come with larger square footage and a yard. However, a condo is often smaller, more affordable, and easier to maintain. Both options have distinct features to consider before determining whether a condo versus a house is the right place for you and your family.
In this article:
Dig deeper: 12 types of homes for buyers and renters
What to know about buying a condo
A condo is a part of a larger structure of units, so you will likely share a wall with another resident, whether next to you, above, or below you. The term “condo” can refer to a unit within a condo building or one within a high-rise condo complex.
Typically, with condos, you own the inside dwelling, and the outside is maintained by a homeowners’ association (HOA). The HOA usually charges a monthly or quarterly fee to unit owners for certain insurance, upkeep, and amenities. The HOA board is primarily a group of unit owners, but it can be professionally run by a management company.
This condo association might offer amenities like a community pool, gym, parking, or lawn care. And condos tend to require less maintenance than a single-family home because you are paying the HOA to provide this. Some might also cover certain utilities, like if the water is shared within a larger building.
Every association has different offerings and fees, so it’s critical that you review all of its rules, regulations, and costs before agreeing to purchase the condo.
Learn more: What is a condo, and is it right for me?
How mortgage lenders view condos and HOAs
If you need a mortgage to purchase a home, it’s vital to check with your lender whether they have any restrictions on financing a condo and their requirements for the HOA. Lenders tend to be stricter with condos and HOAs, which could block you from getting loan approval or cause you to pay more for the mortgage.
For example, some lenders will not approve the mortgage loan or require you to provide a larger down payment if the condo association has no cash reserves. So, it’s important to know whether that HOA is well managed and properly funded.
Lenders will also calculate your HOA costs when determining whether to approve you for a mortgage. You should add the HOA fees to your overall monthly housing costs ahead of time so you don’t hit snags in the mortgage process and lose your offer on the condo. Some HOAs might charge a few hundred dollars per month, while others charge more than $1,000 in monthly fees, especially if it’s an upscale high-rise condo in a popular destination, such as a beach.
Read more: Should you buy a home with a homeowners’ association?
What to know about buying a house
A single-family home is a free-standing structure, meaning there are usually no shared walls, and it sits on its own land. Typically, you also own the land that it sits on.
If you prefer to have yard space, a garage, or more square footage, then a detached house is your better option. But they do tend to come at a higher price tag than a condo, depending on where you want to live.
Many single-family homes do not have HOAs, meaning you can customize the outside of your home and land how you wish. However, some communities have HOAs and/or maintenance fees to help with the upkeep of the neighborhood or to offer residents amenities like community swimming pools, parks, or tennis courts.
If your neighborhood has an HOA, review the costs and rules before purchasing because some are more restrictive than others. For instance, some HOAs might have a pet or noise restriction or require your lawn to look a specific way. Not following the association’s rules could cause you to pay additional fines and even create problems with your mortgage lender.
Dig deeper: What is a single-family home, and should you buy one?
A condo vs. house: Which is better?
When deciding between purchasing a condo versus a house, the choice comes down to your preferred lifestyle, where you want to live, and how much you can afford.
If you want to live in a big city or own an oceanfront property on a popular beach, then a condo might be the more affordable — and most available — option in that area. Alternatively, if you have a large family and space is more critical, a single-family home might better suit your needs.
Here are some key questions to ask yourself:
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What is my monthly housing budget?
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Where do I want to live?
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How much space or rooms do I need?
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What is my monthly HOA or maintenance fee cap?
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What additional amenities do I need (e.g., fitness center or community clubhouse)?
Having answers to those questions ahead of time will help you narrow down your search for the right home for you.
Read more: How FHA-approved condos work and how to qualify
Other types of houses
Condo vs. house FAQs
Is it better to live in a condo or house?
There is no clear “better” choice — it depends on what you want out of a home. A condo may be better if you’d like access to communal spaces, don’t want to deal with maintenance like lawn care, or are working with a smaller budget. A house could be better if you need more space, want a yard, or crave the privacy that comes with a detached home.
Why do people prefer condos over houses?
Some people prefer condos over detached houses because the buyer doesn’t need as much space. Condos also tend to be more affordable than single-family homes.
Is a condo or house safer?
Everything else considered equal, a condo could be safer than a standalone house. There is often a doorman or security guard on duty in condo buildings, and your neighbors are closer (and even share walls in some cases) to see or hear anything unusual.
This article was edited by Laura Grace Tarpley.
