Condo, co-op, townhouse: Find what works best for you

Key takeaways

• Condos involve owning an individual unit with shared responsibility for common areas, co‑ops involve buying shares in a corporation rather than real property, and townhouses usually include ownership of both the home and the land beneath it.
• Condos and co‑ops typically come with homeowners association fees that cover maintenance, insurance and amenities, while townhouses may have lower fees but higher personal responsibility for repairs and upkeep.
• Condos and co‑ops often offer lower purchase prices and a stronger sense of community. Townhouses provide more independence and ownership.

To novice buyers, a condo, a townhouse and a co-op may seem indistinguishable. These options are often more attractive to first-time homebuyers.

They're usually less expensive than single-family houses. They also might offer a greater sense of community because they place residents in close proximity. And they often come with smaller areas of land, meaning there is little or no lawn to mow.

But there are legal and practical differences between the types of housing. They affect not just your monthly payment but how you use your property and who decides.

Here's a look at the pros and cons of each housing type.

A condominium is the individual ownership of a living area inside of a larger structure which houses similar units. The building and common areas are owned jointly by homeowners and all other condo owners.

• The homeowner owns interior space between the walls of a building.
• The homeowners association, or HOA, is responsible for maintenance, insurance and upkeep of common areas.
• The association is governed by a board comprised of condo residents.
• The association sets rules that govern how condo owners use their interior space and common areas.
• The association sets monthly fees that must be paid in addition to mortgage payments.

• Condos are often more affordable alternatives for first-time homebuyers.
• Someone else does the yardwork.
• You get a built-in community with social events.
• The cost of amenities like a fitness center and pool is shared with your neighbors.

• A condo board or homeowners association dictates how the overall property is used.
• Unexpected expenses and inflation can lead to higher fees or a special assessment.
• Deferred maintenance can lead to a hefty special assessment down the road.
• Stiff HOA fees may discourage buyers when you sell.

A co-op is a form of ownership in which residents purchase shares in an association that owns the building where they live. The ownership gives them the right to live in the building. It does not give them ownership of an individual unit.

• Living in closer proximity fosters close-knit community.
• Co-op members are more familiar with each other as neighbors.
• Co-op decisions are made by all members, so more democratic.
• There are fewer costs for paying your personal repairs as property is jointly owned.

• Co-op applications must be approved by the co-op, and applicants can be rejected for personal/petty reasons.
• The application process opens the door to possibility of unlawful housing discrimination (based on race, sex, gender, etc.).
• Co-ops may have greater restrictions on use of the property.
• The application process can take a long time.

A townhouse is a multistory home that often shares exterior walls with another home and is part of a planned community that is governed by a homeowners association. Each home has its own exterior door.

• There are often two or three levels of living space — and some townhouses may have as many as five floors.
• Ownership includes the interior and exterior of the home and the land the townhouse is situated on.
• Owners may be responsible for exterior landscaping and maintenance on their property.
• If located within an HOA community, residents may have access to shared amenities.
• Annual, quarterly or monthly HOA fees go toward common-area maintenance.

In some cases, some townhouses and rowhouses may be operated under condo ownership structures. With this ownership structure, homeowners only own the unit within the walls' confines. Before purchasing a townhouse, you should clarify the ownership structure.

• There is more personalized ownership with structure and land.
• The HOA is often not as restrictive.
• HOA fees can be less because there are fewer amenities.
• Units may only share two sides of the property with residents.

• Townhouses typically have fewer amenities than condos.
• The owner is responsible for maintaining the structure as well as repairs.
• The owner may be responsible for the lawn or surrounding land
• The community is often less tight knit because of the sprawl of townhouse units.

More on this topic:

• Buying a condo in 10 steps
• How to find a real estate agent for a condo purchase
• Making an offer on a condo
• Finalizing your financing for a condo
• What to know about a home inspection for a condo

 This story was updated on May 14.