The Difference Between a Condo, an Apartment and a House: Which is Better for You?

There are several common types of housing each with its unique features. This post will answer “what is the difference between a condo, an apartment, a townhouse, and a single family home?”. I will also compare an apartment to a condo and a townhouse to a single family home. This will help you better understand which each is and what to expect when living in one.

What Is an Apartment?

An apartment is most often one unit in a building; it is a piece of a collection of other units. When I hear the word apartment I think of a rental. You have no ownership stake and will not build any equity in the property. To me, this is the key difference between an apartment and a condo. You are a temporary resident for a stated period of time. In exchange, you pay rent to use the property. The rent, time period of use, and the rules you must follow, and any other terms will be stated in a lease you will sign with the owner of the unit.

What Is a Condo?

A condo (short for condominium) is similar to an apartment. It is most often a unit in a building amongst many other units similar to it. Condo developments range in size. The unit could be one of 500 units in a tall downtown building, or one of 48 units in a collection of two or three-story buildings, or the condo could even stand alone.

The key difference between an apartment versus a condo is you own your condo. Similar to an apartment there are common areas. These could include a gym, vestibules, hallways, a pool, or dog park. You also own a fractional share of all of the common areas and any amenities. Together, through an HOA (homeowner’s association), you maintain and improve those common areas and amenities. Your HOA also can control the use of your property through rules.

What Is a Townhouse?

A townhouse is very similar to a condo. Again, you own a townhouse, the unit is likely one of many in a development, and there are common areas owned together by all owners in the development. Like a condo, it is very likely there will be in HOA to manage the maintenance of common areas and ensure rules are being enforced. The most common difference between a townhouse and a condo is that a townhouse is usually more than one story. The living space is on more than one floor.

What Is a Single Family House?

Lastly, the single family home. This is a standalone home completely detached from shared ownership on any level with your neighbors. You are the sole owner of the home. There may be an HOA, but any rules are likely to be less restrictive compared to a condo or an HOA. The single family house is also referred to by realtors as the single family detached. The detached is to mean it is detached from any other home. Houses have a massive spectrum. There are unlimited layouts, sizes, and features found in a house. A house is the most unique of any home type. Also, due to the lack of rules from an HOA, especially on the inside of the home, you have the most freedom to remodel the home. Really, you can do pretty much whatever you want.

Now, let’s get into some of the nuances of each.

Condo vs. Apartment

Day to day living in a condo vs. an apartment is quite the same experience. There are few differences. Both require you to follow the guidelines for using the property. Again, with an apartment you find the guidelines in your lease whereas with the condo you must follow the covenants of the development which are enforced by the HOA. There are three substantial differences which you must consider.

First, making changes to the property is easier with a condo than an apartment. With an apartment, for any change no matter how big or small review your lease or speak to the landlord directly. Often, renters of apartments are not even allowed to paint the walls. Larger projects such as remodeling a bathroom are most likely completely forbidden. A condo is different.

You own a condo. Therefore, you can paint the walls however you like. You can remodel the rooms how you like. The most common limitation for customizing your condo is that you cannot move or remove interior walls. There may be some exceptions. Your HOA and the covenants for your development will help you understand this.

The second major difference between an apartment vs. a condo is maintenance. When renting an apartment maintenance or the replacement of defective or broken items is the landlord’s responsibility. This keeps you from being financially responsible when a major appliance like the hot water heater or furnace meets the end of its life. Also, it keeps you from managing repairs. Owners of condos must take care of maintenance or replacement of broken items themselves. Living in a condo leaves you with this responsibility.

The last major difference between an apartment and a condo is you rent an apartment but you own a condo. Ownership is what gives you both more freedom to make changes and the responsibility to maintain the property. It also gives you equity in the property. Condo owners are homeowners. Apartment residents are tenants.

Apartment dwellers pay rent. That money is gone. Condo owners pay a mortgage. They are building equity in the property as they pay down their debt and as the value of the property increases. When the apartment tenant leaves she has nothing. When the condo owner leaves, she sells the property. The equity in the property (sale price minus any outstanding mortgage balance) is returned to her.

Townhouse vs. Single Family House

Though a townhouse is similar to a condo. It is also similar to a single family house. Each is owned by its residents. With each the owners can do what they want inside the property. A townhouse has a shared common wall with one or more neighboring properties. A single family house on the other hand, does not share any of its property with any other property. Each has very similar uses with little control from outside forces. The HOA for a townhouse may be a little stricter than that of a subdivision for a single family house.

The most significant difference between these two types of homes is the closeness of neighbors. When living in a townhouse you will see your neighbors. And you will see them a lot. Townhouses often have a yard, but it is usually small. Parking cars is different with a townhouse, too. You may have a garage. But streetside, a communal garage, or parking lot are more common. So you’ll be bumping into neighbors there, too.

With a single family house you can have a small yard or a large yard. Many single family houses do have a garage. If not, there may be a driveway. Living in a single family house, even those which are close together as you see in some subdivisions, will give you more space and privacy from your neighbors.

Conclusion

I hope this helped you understand the difference between an apartment, a condo, a townhouse, and a single family home. Each carries with it different risks and different rewards. There is no easy answer about a condo vs. a house or which is better to buy. It is all relative to the lifestyle you want to live. As with so much in life, there are positives and negatives of each.

Apartment, Condo, Townhouse, Single Family House

Comparison Chart

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