Condo vs Townhouse: Which Is the Smarter Buy for Long-Term Value?

If you’ve narrowed your home search down to a condo or a townhouse, you’re already well ahead of most first-time buyers. But the next question is more complex: which one is the smarter financial choice?

This article goes beyond definitions. We’ll compare upfront and monthly costs, financing differences, long-term appreciation, and resale value to help you make the right decision based on your goals—not just your zip code.

If you’re still learning the basics of these property types, you may want to start with our condo vs townhome vs PUD vs Twinhome guide for definitions and ownership structures. This article focuses specifically on the financial pros and cons of each to help you make a smarter, long-term decision.

Upfront Costs and Financing Differences

Purchase Price and Square Footage

In many markets, condos are less expensive than townhomes. According to data from the National Association of Realtors, the median condo price is typically 5–15% lower than a comparable townhouse, especially in urban centers.

But lower price doesn’t always mean better value. Condos are also usually smaller—meaning your price per square foot may actually be higher.

Financing Considerations

Financing a condo can be more complicated than financing a townhouse. That’s because the lender isn’t just evaluating your financials—they also evaluate the entire condo project. If there’s pending litigation, inadequate reserves, or high investor ownership, you may not qualify for a conventional loan at all.

Townhouses, on the other hand, are generally treated like single-family homes and don’t require project approval.

Also important: Some lenders may require a higher down payment on a condo, especially in buildings with financing risk. This can affect your ability to avoid PMI—or qualify at all.

Closing Costs and HOA Buy-ins

Some condo associations require buyers to pay 1–2 months of HOA dues up front, or contribute to a reserve fund at closing. Townhouses may have smaller or no such buy-ins, though this varies.

Monthly Costs Breakdown

HOA Fees

Condos almost always have higher HOA fees than townhouses—but for good reason. Your HOA may cover:

• Building insurance

• Exterior maintenance

• Landscaping

• Amenities like gyms or pools

Townhouses usually have smaller HOAs, but you’re on the hook for more upkeep.

For example, a condo may have an HOA fee of $400/month, while a townhouse may be just $150/month. But you’ll need to budget for exterior maintenance in the townhouse separately.

Maintenance and Insurance Costs

Condo owners typically only insure the interior structure and contents (known as an HO-6 policy). Exterior repairs and roof replacements are handled by the association. In contrast, townhouse owners may need a standard homeowners policy, since they’re responsible for the exterior.

Over time, this means:

• Townhouses require more personal maintenance budgeting

• Condos may issue special assessments for major repairs not covered by reserves

Appreciation and Resale Value

How These Properties Appreciate

Townhouses often appreciate faster than condos in suburban markets due to larger footprints, more privacy, and stronger family appeal. They’re typically more desirable for long-term occupancy and resale.

Condos may perform better in dense urban markets, but their appreciation tends to trail single-family homes and townhouses in more balanced areas.

Resale and Buyer Demand

Condo resale can face challenges:

• Smaller buyer pool (some lenders won’t finance certain condos)

• Concerns over HOA health or pending litigation

• Limits on FHA or VA financing

Townhouses often have broader appeal, especially if they include a garage, yard, or multi-level floor plan.

Lifestyle Fit vs Investment Fit

Your personal goals matter just as much as the math. Here’s when each might make more sense:

Who Should Consider a Condo?

• Urban professionals who want to live close to city centers

• Buyers who value low-maintenance living (no yardwork or exterior upkeep)

• Short-term buyers or those planning to move within 5 years

• Buyers with tighter budgets

Who Should Consider a Townhouse?

• Buyers planning to stay 5+ years and build equity

• Those who want more privacy and control

• Families, couples, or buyers planning to rent it later

• Buyers concerned with resale value or long-term appreciation

Condos vs Townhouses: Financial Comparison Table

FAQs – Financial Differences Between Condos and Townhomes