Buying a condominium or a townhouse, especially as one of the very first real estate purchases you’ll ever make, is a great way to ease yourself into the real estate game. There are differences between a condo, a townhouse, and a single-family home. Regardless of the term “single-family” this just basically means it’s a separate, stand-alone, typically stick-built home that’s not attached to any other property. A condominium and townhomes are. Condominiums and townhouses or townhomes are attached to other buildings even if it’s just one other unit. So what’s the difference, the benefits, downsides, and some of the major questions to ask when buying a condo or townhouse?

What is a condo?Questions to Ask When Buying a Condo or a Townhouse

A condominium is similar to an apartment in that it is typically attached to multiple units at the same time. A condo or condominium is usually a single building or complex consisting of several buildings with separate units owned by individual residents. These units can be different sizes, styles, high-rise condominiums or low rise. They don’t necessarily have to be more than one or two stories but can also include high-rise, 100 story buildings in major cities. The main difference between a condo and an apartment is ownership. Condos are usually managed by a condo association board but each individual owner has separate ownership to the inside of that units. If you rent a condominium, the landlord would be the owner of the unit. If you rent an apartment, one landlord or management company owns the entire complex and rents out individual units. Apartments are typically not owned but rent it. Renters only own their personal property inside of the unit and nothing on the outside. Condominium owners not only own their personal property inside the unit but the walls, doors, flooring, ceiling, and any structure that is attached to the inside of the building. The outside is typically managed, repaired, and maintained by the condo association.

What is a townhouse?

Questions to Ask When Buying a Condo or a TownhouseA townhouse also called a townhome, can be a single-family home that shares one or more walls with another independently owned townhouse. These townhouses are typically two or three stories and set in rows or groups. You might only share one wall with another unit or every wall with another unit. This is slightly different than a duplex in that a duplex can be a building with two separate apartments, condos, or units but are usually one-off properties. If there is a collection of duplexes in a particular complex or within a community, it’s considered a townhouse.

Similarly, with a condominium, the owner owns the inside of the townhouse including walls, doors, etc. Sometimes townhouses will feature backyards or outside amenities that can be owned by the townhouse owner as well. This is often called a PUD townhouse where you actually own the land the townhome sits on and usually a small backyard and front yard. PUD simply means you own part of the land that the townhouse sits on, not just the inside of the townhouse.

So, now that you know the difference between a townhouse, apartment, duplex, and a PUD townhouse, what are some of the best questions to ask when buying one of these?

Related: Do you need your own agent when buying a condo or townhouse?

Which do you want to manage?

Out of these selections, what type of home are you willing to manage and maintain? A condo or townhouse is a great way to ease into the market as someone else is doing a lot of the outside maintenance giving you a chance to learn what homeownership really is. Often times you can start with a condo or townhouse, build up some equity, and have enough to put a fair down payment on your next home, which could be a single-family home. Buying a single-family house as one of your first real estate purchases means you are now 100% responsible for everything inside the property as well as outside.

How much are the condo association fees?Questions to Ask When Buying a Condo or a Townhouse

Condo association fees can range anywhere from $10 a month to over $2000 a month depending on the complex and all the amenities the Association provides and maintains. High-end, high-rise condominiums that have a plethora of amenities may be higher on the Association fees. You’ll need to factor that into your monthly housing costs.

What kind of amenities do you want, need, and will use?

If you’re looking at a condominium that has 20 different amenities but you’ll only use one, do you really want to be paying the Association fees for all these other amenities? Look at the amenities that the complex or community provides and if you’re willing to pay the extra association fee to use those amenities.

Is a pet-friendly complex important to you?

Not all complexes, buildings, or townhouse communities will allow pets, even if you own the unit. It’s important to understand if you can bring your pets along including exotic animals like snakes, ferrets, or other not so typical household pets.

More: How to buy a second condo or home

Do you agree with the regulations?

Condo associations will have their own set of rules called CC & R, which stands for covenants, conditions, and restrictions. This will usually be presented to a buyer if you’re interested in purchasing a unit in the complex. The seller should give you time to go over it giving you a chance to ask any questions and verify any certain regulations. These regulations could include noise ordinances, pet restrictions, satellite dish restrictions, guests, and about 1000 other small details. If you are uncomfortable with this document you may want to seek the help of a real estate attorney to go over the document and point out any red flags.

Does the Association have a good reserve fund?

Questions to Ask When Buying a Condo or a TownhouseWhen you pay into the Association, those fees go to maintain amenities, the building, and replace items that may need upkeep over the years. If the reserve fund does not have enough to cover major maintenance issues such as a new roof, painting job, new siding, or landscaping, you may be assigned a special assessment fee. This is where every unit owner is required to pay an additional fee to cover the maintenance. It’s important to ask how often the special assessments are required if the Association maintains enough of the reserve fund so that owners don’t have to come up with extra funds, and what happens if people don’t pay?

Are there any pending lawsuits?

Over time, if unit owners don’t pay their association fees or if there’s an issue between a unit owner and the board, there may be a lawsuit. Lawsuits can be a huge financial drain on the condo board, especially if they lose in court. Ask about any pending lawsuits and ask about the condo or townhouse community’s liability insurance to make sure they are covered just in case.

Talk to the neighbors.

Before finalizing the purchase of a condo or townhouse talk to a few neighbors to see how satisfied they are with the complex and the Association. What are some of the biggest complaints that people have heard at board meetings? Ask how quickly items get resolved if unit owners have complaints. Ask about the management team and any perks you may not know about right off the bat.

Ask about additional storage.

Some condominiums have very minimal additional storage space or you may need to pay extra for a storage facility.

These are probably the most common questions you’ll need to consider when buying a condo or a townhouse.

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