Condos beat town houses and vice versa

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Dear Real Estate Adviser,
I am considering buying a condo on the beach, but I’m now wondering if a town house wouldn’t be better due to the fact that homeowner association fees are lower, which would allow me to use the difference to paint and otherwise improve the place. What are your thoughts on condos versus town houses?
— Olga T.

Dear Olga,
Yes, the homeowners’ fees in town houses are lower because you are responsible for the upkeep of more space. In fact, there are lifestyle trade-offs to ownership of town houses and condos, as you’re probably discovering. While homeowner associations in both product types can limit the extent of improvements you can make, town houses are typically much more flexible in allowing different color schemes, flooring choices and other minor improvements.

There are other differences to consider as well. In a condo, you are buying only your living space, not the walls, ceiling, floor or exterior. In a town house, you own it all and typically hold title to the land where the home sits. Hence, your insurance will be costlier because you have to cover more area. Condos are usually less expensive than town houses because they tend to have less floor space and less storage space. Condos are usually one level and tend to appeal more to seniors who have downsized their living needs or to those who just prefer a less-complicated lifestyle. Town houses typically have at least two floors, and sometimes a third, and are appealing to more ambulatory people who like multidimensional living. Tax assessments are generally smaller in condos because owners are taxed on only a percentage of their actual market value, whereas town houses are taxed like standard single-family homes.

Besides being unit-based home purchases, the two product types have other similarities. Their homeowner associations are typically responsible for the upkeep of any common areas, which may include a pool, tennis courts, picnic grounds and other recreational amenities and community conveniences. Condo and town house associations can put restrictions on unit resale, with condo boards generally exerting tighter controls. Unlike with a town house, a condo owner’s monthly association fee covers exterior property insurance, building maintenance, yard care, sewer, water, pest control, trash pickup and other elements.

It’s hard to say which housing type is easier to resell, because this can depend greatly on location and amenities, but condos seem to be a little tougher sell in this real estate cycle.

Certainly, the economics of the still-depressed housing market may ease your purchase more now than, say, in a couple of years. And if those extra living dimensions of a town house present you no physical challenges and the added autonomy is important to you, you might indeed be happier in a town house, particularly if the two beachfront properties are similarly priced.

But if you do go the town house route, snag an end unit if possible to limit your exposure to noise and neighbors. End units are the most desirable, much as top-floor locations are often preferred by condo owners. And read the fine print carefully. Some town house developments operate under more of a condo-ownership structure. To get an insider’s perspective, I suggest you casually interview a few owners of the town house or condo community in which you’re interested.

Good luck with your beachfront buy! Nothing like waking up to the sound of waves crashing on the shore.

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