Condominiums and Town Houses

The primary difference between a condo or town house and a single family home is what you own.  In a single family home you own the house itself and the land it sits on.  For a condo or town house you typically own only the interior of the home.

To pay for the maintenance of the exterior of the complex and common areas you will need to pay a monthly fee.  How high this fee is varies with the age of the complex (older buildings require more maintenance) and the types of common areas.  For instance, complexes with gyms and pools will have higher monthly fees.

In some downtown areas, for instance Seattle and increasingly downtown Bellevue, condos are the only option for those who wish to live close to the action.  Condos also are appealing to those who do not want to deal with the higher maintenance requirements of a single family home and those who do not want to maintain a yard.

Condos and town houses are also appealing for first time buyers due to their lower prices.  Many buyers who desire homes in expensive neighborhoods start with a condo, let it appreciate for a few years, then sell it and buy a single family home.  Condos are also ideal choices for people who expect their income to rise in the near future, but want to gain a foothold in the market so they have some equity when they can afford a higher mortgage.

Often first time buyers ask how the appreciation of condos and town houses vary with single family homes.  Condos do appreciate at different rates than single family homes, but these rates vary enough that there is not one constant answer.  Of course, your real estate agent can tell you the latest trends – though they are no indication of future activity.

When buying a town house or condo, make sure you determine up front what the monthly fee is.  Also, enquire what this fee covers.  It is also wise to find out how much the rates have increased lately.  If you can obtain the minutes from the last few meetings of the homeowner’s association, you may be able to detect potential problems with the complex.  Remember that, while you do not have to fix structural issues in the complex yourself as you would with a single family home, the funds for these repairs will still come out of your pocket.