Condo vs. Apartment vs. Townhouse: 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. a condo vs. an apartment? We’re just kidding, of course. There are plenty of telltale physical and lifestyle signs and pros/cons between the three, but to someone new to homeownership, or someone who needs a refresher, they 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 townhouse vs. condo vs. apartment and see which one is right for you.

Townhouse vs. Condo vs. Apartment

What's the difference between an apartment, condo, and 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.

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 yard, garden, or small patio. Some townhouse communities also share amenities (think pool, courtyard, BBQ grills). You can rent or buy a townhouse, but, similar to condos, they are usually individually owned. The difference between a townhouse vs. condo, though, is typically the property structure.

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 (aka Homeowners Association), 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 condo attorney, if you can.

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.

Q: Is a condo nicer than an apartment? A: Condos are not necessarily nicer than apartments. I mean, just take a look at these luxury rentals in Manhattan for proof. However, in the condo vs. apartment debate, 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.

Apartment Pros and Cons

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 perfect for people who are single or couples who don’t need a lot of space. If you work outside your home, then all you really need is a place to sleep, relax, eat, and shower, right? You can find a no-frills apartment that meets your needs while being affordable enough to allow you to save up money for a home or other future investment. Apartment leasing options also typically offer flexibility and no long-term commitments. You can expect minimal home maintenance, as well, since the landlord or rental company is responsible for upkeep and repairs for standard wear-and-tear.

Cons of Living in an Apartment

Apartments offer tighter living quarters and aren’t typically ideal for families with young kids who need to run around. There are also limitations to renovating your apartment, as signing a lease comes with agreeing to abide by certain rules and regulations. For example, having pets and parties may be a no-go. And drilling holes in your walls to hang pictures and shelves? That may be off-limits, as well.

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

Condo Pros and Cons

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 the maintenance will be manageable, and you won’t have to mow a lawn or clean the shared pool and tennis court. Condos are also likely more affordable than townhouses because they don’t come with land. Insurance rates are lower, too. They’re also tremendously flexible: Many people live in condos year-round or use them as vacation homes for themselves or friends and family. And with outdoor maintenance handled by the complex, you don’t need to worry about upkeep as much as you would with a single-family house.

Cons of Living in a Condo

Living in a condo requires you to follow many HOA rules and regulations. You’ll also have to pay HOA fees for the home maintenance and amenities. Additionally, condos are typically smaller than townhouses and are not often suitable for large families. 

The condo community can be both a pro and a con, depending on how comfortable you are 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.

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.

Townhouse Pros and Cons

Pros of Living in a Townhouse

Townhouses are perfect for those who are looking for more space than an apartment or condo will typically provide but without the full maintenance commitment of a detached home (townhouse community HOAs are often responsible for maintaining the exterior property). Singles may buy one as an investment, and couples may buy one to grow into if they plan to have a family down the line. First-time homebuyers may also purchase a townhouse with a plan to upgrade to a bigger home in the future. And of the three types of homes we’re evaluating, townhomes will bring you closest to that “single-detached dwelling” lifestyle.

Cons of Living in a Townhouse

So what are the disadvantages of buying a townhouse? 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. And 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.

Condo vs. Townhouse vs. Renter’s Insurance

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. Depending on your dwelling, there are a few types 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 (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.

Townhouse vs. Condo vs. Apartment: 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 the condo in the future for passive income

Condo vs. Townhouse Mortgage

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 a townhouse, you are buying the dirt and everything above and below it. Getting a loan with a townhouse is basically the same as getting one for a single-family house. It’s a much less complicated home loan than one for a condo,” says loan expert Tony Trungale in an interview with My Mortgage Insider. 

“When getting a loan for a condo, you have to go through a process of qualifying as a borrower and also making sure the condo is approved,” he adds.

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. 

Bonnie Azoulay Elmann is an NYC-based freelance writer and frequent contributor to the PODS Blog. 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.