Townhouse vs. Condo vs. Apartment: Which Is Right for You?

It’s one of the great questions of the real estate business: What the heck is the difference between a townhouse vs. condo? What about a condo vs. apartment? We’re just kidding, of course. There are plenty of tell-tale physical and lifestyle signs and pros/cons to be listed in the townhouse vs. condo vs. apartment analysis, but to someone new to homeownership, or someone who needs a refresher, the detailed differences between the three may not be readily apparent.

Whether you're living on your own and want to rent somewhere close to the action, a young family that’s not quite ready to commit to purchasing a single-family home, or a retiree looking to downsize, read on to compare life in a condo vs. apartment vs. townhouse and see which one is right for you.

Condo vs. Townhouse vs. Apartment

What's the difference between an apartment vs. condo vs. townhouse? The main factors are structure, renting/owning capabilities, and exterior property. Choosing a certain home style is also dependent on your lifestyle goals today and in the future. Let’s dive in and take a closer look at each one.

Apartment

Apartments are typically one-story units that are part of a multi-story building. Some reasons people choose to rent apartments include close proximity to the action with a lower cost of living, flexible leasing options, community amenities (like a pool and fitness center), various floor plans, or a way to “test the waters” in a city or neighborhood before purchasing a forever home. Of course, this is a very popular style of homes for bigger areas like Manhattan. However, with the current high price of real estate, more and more people are considering the advantages of renting an apartment versus purchasing property. 

Townhouse

Townhouses are multi-floor homes that share side walls with neighboring properties. They typically look very similar and include some exterior property, such as a small yard, garden, or patio. While townhomes are more commonly located in urban areas where real estate is a premium, they can be found in cities and towns of all sizes. 

The appeal of townhomes is that they have the feel of a home without the added maintenance. With a traditional single-family home, you take care of the home and the land it sits on; however, with a townhouse, because you don’t have a significantly sized yard, you likely won’t need a lawn mower, landscaping service, etc.

If you do want a taste of the outdoors, you may be able to find a townhome community that shares amenities like a pool, courtyard, or BBQ grills. Keep in mind that these extras may come with a monthly Homeowners Association (HOA) fee, though. 

You can rent or buy a townhouse, but, similar to condos, they are usually individually owned. However, if you’re looking for a place to call home in New York City (or other large metropolitan cities on the East Coast), you may be wondering about the difference between a townhouse and apartment. If you like the idea of renting (like with an apartment) but still want the smaller townhouse feel, look into apartment townhomes. This is when a townhome is divided into separate units rather than one structure.

Q: What is the main difference between a townhouse and a condo? A: When it comes to a townhouse vs. condo, the main difference is the layout. Condos are typically units inside a larger building, and townhomes are connecting multi-floor homes. There’s also a difference in ownership type. Condos are typically owned by the resident, whereas townhomes can be either owned by the resident or rented to a tenant

Condo

Condos (or condominiums, if you’re fancy) can structurally look like apartments or townhouses, even including a larger community where residents share amenities and common areas, much like an apartment complex. Knowing that, many wonder, “Is living in a condo better than living in an apartment?” While it’s not necessarily better from a lifestyle standpoint, the difference between a condo vs. apartment has to do with property ownership.

Whereas an individual apartment is for rent, an individual condo is for sale (unless you rent from a condo owner). We know it can get pretty confusing. But if you follow the rule of thumb that a condo is often lived in by its owner and an apartment is lived in by a renter, you’ll keep them straight.

Additionally, condo owners are responsible for the maintenance and upkeep of the inside of their unit, including plumbing and electricity, but the condo association will maintain the exterior. Rules and regulations are enforced by the HOA, which is made up of member residents who help maintain the building and community. Determining who is responsible for what can all get a little confusing, so your best bet is to look closely at your documents and bring them to an experienced real estate attorney, if you can.

Q: Is a condo nicer than an apartment? A: The condo vs. apartment debate is nuanced because condos are often regarded as nicer than apartments, but that’s not always the case. I mean, just take a look at these luxury rentals in Manhattan for proof. However, the benefit of a condo is the equity one receives through property ownership. Other than that, there’s not much difference, typically, between an apartment and a condo with similar styles, square footage, and amenities.

When it comes to choosing a condo vs. apartment, it helps to know what you get — and what you don’t — with each property type.

What Are the Pros and Cons of an Apartment?

Pros of Living in an Apartment 

Debating between a condo or apartment? Here’s some information to help you decide which type is right for you and your situation.

Apartments are great for people who are:

• Single or couples who don’t need a lot of space
• Working outside of the home and don’t want a lot of frills (this can help you save up for buying a home of your own or another investment)
• Looking for flexibility and no long-term commitments
• Only interested in minimal home maintenance, since the landlord or rental company is responsible for upkeep and repairs for standard wear-and-tear

Already know that a high-rise apartment is your moving destination? You need to check out these seven essential tips.

Cons of Living in an Apartment

• You have a large family with young children and need more square footage than an apartment can offer.
• You want to use your real estate as an investment.
• You’re an HGTV fanatic and want to create a space that encompasses your signature style (most leases prevent tenants from making renovations).
• You’ve just adopted a new four-legged family member, and your lease doesn’t allow pets.

Want to own property but don’t have time for land upkeep? Consider a condo!

What Are the Pros and Cons of a Condo?

Pros of Living in a Condo 

If you’re a fan of the apartment lifestyle but you want to invest in property, a condo may be right up your alley.

Living in a condo means:

• Maintenance will be manageable, and you won’t have to mow a lawn or clean the shared pool and tennis court.
• You’re probably paying less for the condo than a townhouse because condos don’t come with land. Insurance rates are lower, too.
• You have flexibility. Many people live in condos year-round or use them as vacation homes for themselves or friends and family.
• You don’t need to worry about upkeep as much as you would with a single-family house.

Cons of Living in a Condo

Is there a difference between owning a townhouse vs. condo? They may seem similar on the surface, but there are some financial and lifestyle considerations.

Townhomes are sometimes chosen over condos because:

• Living in a condo can require you to follow more HOA rules and regulations than a townhome because it has more communal amenities, like a pool or rec room.
• You have to pay HOA fees for the home maintenance and amenities (although this is likely with many townhomes, too).
• Condos are typically smaller than townhouses and are not often suitable for large families.
• The condo community can be a con if you’re not comfortable living close to your neighbors and sharing communal spaces.
• Noise is a factor, but that can be outweighed by the strong friendships that can come with condo living.

Wondering if it’s the right time to invest in residential real estate? Even though we’re currently in a sellers’ market, it’s still advantageous to purchase a condo, especially for first-time buyers. Condos can appreciate in value over time, and if you decide to move on to a larger home, you can still keep the condo and rent it for passive income.

Pro tip for snowbirds: If your condo is a second home and you’re living there during the winter months, you’ll need to protect your main home from icy conditions and other weather-related hazards while you’re away. You can learn more about how to winterize your home and keep your stuff in tip-top shape on the PODS Blog.

Townhomes are great for renters or buyers who want more space but not more land.

What Are the Pros and Cons of a Townhouse?

Pros of Living in a Townhouse

Not ready to make the leap to single-home ownership? That’s ok. Townhomes offer the feel of a house without the yard work and exterior maintenance (more on that in a minute). 

Perks of townhome living include:

• Getting more space than an apartment or condo without the full maintenance commitment of a detached home (townhouse community HOAs are often responsible for maintaining the exterior property)
• Being able to use the townhome as an investment
• Using it as a stepping stone as a first-time homebuyer to upgrade to a bigger home in the future

Cons of Living in a Townhouse

The benefits of living in a home without the obligations. Why wouldn’t you choose a townhome? They are pretty great, but no living situation is perfect for everyone. 

Here’s why some people decide that a townhouse isn’t right for them:

• It may or may not be part of the HOA, which comes with extra rules and fees.
• If you’re sharing a wall with a neighbor, it may be noisy and afford you less privacy.
• Did we mention the stairs? This could technically be a pro if you’re looking for a way to integrate calf exercises into your daily routine. Just keep in mind that grocery day takes on a whole new meaning with two or three flights of stairs.

Townhouse vs. Condo: Is Renters’ Insurance Needed?

Okay, let’s get into the weeds a little bit here. Nobody wants to think that something bad could happen to them or their stuff, but that’s, unfortunately, the world we live in, and that's why insurance exists. But are townhouses safer than condos? Are condos safer than townhouses? One style isn’t safer than the other. Depending on your dwelling, though, there are a few types of insurance to familiarize yourself with. 

Condo insurance (aka HO-6 insurance) protects against liability claims or property loss inside your unit. A master insurance policy (which your HOA is responsible for carrying) protects common areas outside your unit, like the walkways, elevators, swimming pools, and lobbies. Your share of the cost for the master policy is typically included in your HOA fees. This reflects the general agreement that a condo owner is responsible for everything within their walls, and the complex is responsible for what’s outside.

There isn’t really a “townhouse insurance.” Rather, townhouse owners would simply get a homeowner’s insurance plan (like you would with a detached home), and renters would get renter’s insurance (the same applies to you if you live in an apartment). Depending on the policy, the insurance would protect against damages caused by smoke, wind, fire, etc., as well as theft and liability. If your townhouse is part of a larger community with an HOA and shared amenities, you may be expected to contribute to a master policy, as well — just like condo owners.

While traditional wisdom says that buying is better than renting in every scenario, there are some situations where you’re better off going the rental route.

Condo vs. Apartment vs. Townhouse: Rent or Buy?

You know you’re not ready to buy a single-family home, so should you rent an apartment or townhome instead? Or is it advantageous to purchase a condo? While traditional wisdom says that buying is better than renting in every scenario, there are some situations where you’re better off going the rental route. Here’s a handful of those.

When You Should Rent

• If you don’t have enough cash on hand for a 10- to 20-percent down payment and closing costs
• If you’re in the process of improving your credit score
• If you plan to move again in the next five years
• If you live in a major metropolitan area (some studies claim that renting is cheaper than buying in many of the largest U.S. cities)
• If purchasing a home would take away too much of your cash flow and/or reserves
• If you want the freedom that comes with renting, which means things like having more independence to travel, not having to handle your own repairs, and having the ability to relocate easily

When You Should Buy

• If real estate prices are below the national average, as this is a great way to build equity and even possibly make some money if you sell the condo for more than your original purchase price
• If you plan on staying in the same city for five or more years
• If you’re a first-time homebuyer and want to rely on your HOA fee for property upkeep (no mowing lawns and cleaning gutters for you!)
• If you want more control over design aspects, like paint color, appliances, countertops, etc.
• If you think you’d want to rent out the condo in the future for passive income

Townhouse vs. Condo: What Are the Mortgage Options?

Just like when purchasing a detached home, you can secure a loan to buy a townhouse or a condo. The biggest difference between a condo and a townhouse when it comes to a mortgage, though? The financing options. 

With townhouses, unlike condos, you’re purchasing the building and the land. Because of this, the townhouse financing process operates similarly to the single-family home one. The buyer needs to qualify for the loan, apply for a mortgage, and go through processing and underwriting. Then the purchase is approved and closed. 

The condo financing process is slightly more complicated than closing on a townhouse because it involves questionnaires about building financials and managing agent involvement for appraisal purposes. Additionally, sometimes a co-op or condo board has to approve the purchase application.

Q: Is a townhouse a better investment than a condo? A: Townhouses are often considered better investments than condos because, with a townhouse, you own the structure and the land. There are also usually lower association fees, more privacy, and extra space. This is especially great for growing families. Plus, they typically cost less than a single-family home.

PODS can help you handle your move, no matter which property type you choose.

How To Choose What’s Right for You

A few things to consider while evaluating your options include the size of your family, your budget, whether or not you have pets, your lifestyle, how much home maintenance you want to take on, and (last, but certainly not least) the city in which you want to live.

And while all three styles of home can be found in nearly every corner of the country, the price point and square footage of each will obviously vary depending on location. For example, if you’re looking for a townhouse in New York City versus one in Dallas, your Zillow searches will look drastically different. While the Big Apple definitely has its share of massive dwellings, generally speaking, townhouses in NYC are smaller and (you guessed it) more expensive than those in Dallas. 

Moving Into Your New Home (Whatever It May Be)

Whichever style of home you choose, PODS is ready to help you make the move. With different sized containers to meet your needs, built-in storage, and even moving services specially designed for city moves, PODS has you covered. For more information about moving to an apartment, condo, or townhouse, check out the PODS Blog. 

Bonnie Azoulay Elmann is an NYC-based freelance writer. Her work has appeared in Glamour, Health, and Parents, among others. She is an extremely driven digital storyteller who may or may not have a slight obsession with fanny packs.