Freehold vs Condo Townhouse: Ultimate Comparison

Are you in the market for a new home? If so, you may be wondering if a condo or freehold townhouse is the right choice for you. With the many factors to take into account, it’s important to consider not only your budget but also your style and personality. It’s about creating an environment that matches who you are as a person.

In this article, we will compare and contrast freehold and condo townhouses to help you explore what you’re getting into before you sign on the dotted line.

What Is a townhouse?

A townhouse is a residence that is connected to other residences or townhouses on one or both sides. It can either be connected on one side, known as an end unit, or on both sides, known as an interior unit. These residences are separated by a firewall and are not as big as detached houses.

Types of Townhouses

There are two main types of townhouse ownership: condominiums and freeholds. Each has its advantages and disadvantages depending on your preferences and lifestyle. Condominium townhouses are often preferred by busy professionals and families with children, whereas those who enjoy their privacy may be drawn to freehold units.

A condo townhouse is a structure in which you own the interior of a unit, but the exterior of the unit—such as the common areas shared by all residents, hallway, reception, parking spaces, and private outdoor space—are owned by a condo corporation.

A freehold townhouse is a structure that is also called a row house. It is attached on both sides of other residences but is detached by ownership, and the owner of each unit has full rights to modify it or sell it to someone else. The land on which the townhouse structure is built along with the front yard and backyard goes with the title ownership.

Condo vs Freehold Townhouse: Similarities and Differences

Architecture

A condominium, also commonly referred to as a condo, is essentially an individually owned apartment unit or home within a multi-unit building. The word “condo” is a contraction of the words “condominium” and often just simply refers to any residential property containing multiple condo units. A townhouse, also known as a semi-detached house, is a type of single-family dwelling found in urban areas. It is similar to a semi-detached house because, as its name suggests, it is composed of two houses that are attached with common walls but have separate entrances and have no intervening space.

Ownership

A condo’s unit title includes exclusive ownership of the interior space of the home and shared ownership of common property areas with other townhouse owners. A freehold townhome’s lot title includes complete ownership of both your home’s interior and exterior.

Costs And Fees

The cost of acquiring a condo versus a townhouse are generally relatively the same. Both have similar closing costs, insurance premiums, property taxes, and furnishing costs. They also each have a reserve fund to maintain the building and grounds. The reserve funds are insured by an insurance company and are not your money or property. These insurance premiums are negotiated by the board of directors and paid by all townhouse owners equally each month as part of their monthly association fee.

Privacy

They say you can’t put a price on privacy, but when it comes to condominiums versus townhomes, it’s about exactly that. In theory, you’d think that owning your condo is the most private option because you have more walls and doors between you and your neighbors. But this doesn’t always hold in real life. For example, in many instances, townhouses are more private than condos that have common areas separating them from the next unit – such as lobby entrances, stairwells, and hallways. This is because there is more space for people to hang out around these common areas which means less privacy for those who live in close proximity or directly behind one another.

Homeowners Association

While the management of condo and townhouse communities may appear similar, there are some important differences to consider. Condo associations handle building upkeep, as well as interior common spaces. Townhouse communities must deal with exterior common spaces such as lawns and in some cases, roofs, as well as shared outdoor areas. Unless the community is high-end (in a pricey neighborhood), the typical townhouse HOA does not provide as many benefits as a condo’s HOA. As a result, a condo will almost always have higher HOA fees than a roughly similar townhouse in the same neighborhood.

Amenities

The amenities in a condo townhouse will vary from building to building based on their focus. Some condos offer a wide range of amenities that appeal to young families, older couples, and everyone in between, while others are focused on attracting couples or retirees with next-level amenities like golf courses and spas.

Condo towns have all the same common areas as traditional high-rise condos, which include indoor swimming pools, gyms, yoga studios, entertainment rooms equipped with large TVs and card tables, guest suites for visiting friends or family members to stay overnight, party rooms for hosting events like birthdays or weddings, and more.

Freehold townhouses tend to be more focused on catering to families. They offer a wide range of amenities depending on the size and type of the property. The smallest developments may have fewer amenities, while larger ones may have parks, green space, driveways, fitness centers, outdoor pools, outdoor tennis courts, party areas, and other essential services.

Communities

Condo owners have more opportunities to get to know their neighbors because they share common areas and amenities. This means more social interaction and more chances to build friendships in the condo communities. 

In freehold homes, neighbors are often separated by fences, so social interactions within the townhouse community tend to be limited to the occasional conversation over the fence. In some freehold towns, neighbors get to know each other and there are many organized activities. It’s common to see people chatting as they walk their dogs or do yard work together. There is a real sense of friendship between neighbors when you live in a freehold townhouse.

However, neighbors are different. Don’t worry, there are always many ways to deal with bad neighbors if you have them.

Responsibilities, Rules, And Regulations

Owning any home involves obligations, but a condo owner deals with less maintenance than freehold owners do. That’s because the HOA is responsible for the upkeep of common areas and the individual units are only responsible for their dwellings. Condo associations take care of problems like leaky roofs and broken pipes. 

Condominium ownership comes with a lot of rules and guidelines set by the condo’s HOA which commonly includes restrictions, conditions, and covenants. These guidelines keep condos uniformly managed and maintained so that owners can live in peace and harmony.

In most cases, owners will be a member of a freehold or condo community or association, where they share some of the costs of caring for common areas and buildings with their neighbors or have some decisions made by a board. A freehold owner can do whatever they wish to their home without permission from anyone else. They are in charge of all maintenance, including issues with the house and the land it’s on. 

Freehold owners are also responsible for following HOA rules and regulations. They often have rules—such as those specifying the paint colors of the exterior, fence designs, and the frequency at which lawns must be mowed, exteriors must be maintained or landscaping must be trimmed—that are designed to maintain a certain aesthetic in the community. 

Property Taxes

Your property taxes are determined by a couple of factors: the assessed value established by the assessor and the local mill levy. You are responsible for paying them based on the fair market value of your townhouse.

Because condos and freehold townhouses tend to be smaller compared to a detached single-family home, they usually benefit from lower taxes. The common areas and amenities are shared with the other residents, lowering each owner’s share of the entire property tax burden.

Resale Value And Financing

After all the fees have been tallied, purchasing a freehold or condo townhouse can be a great investment because its resale value tends to increase over time. Normally, its value is better than that of a detached single-family house. A well-run freehold and condo community can make selling both easier and more lucrative for the owner of the property, as well as help stabilize housing prices during an economic downturn.

Freehold Townhouse: Pros and Cons

There are a lot of advantages and disadvantages when it comes to buying a freehold townhouse. To help you decide if it is right for you, let’s take a closer look at some of the major pros and cons.

Freehold Pros

Wider Space. While a single-family home is often the most popular choice for buyers, townhouses are very popular for buyers who want a little more space than a condo but don’t need the upkeep of owning a single-family home. 

Community Amenities. Townhouses give you the best of both worlds: they offer condo-living privacy and they’re located near the community center and park. Townhouses are perfect for families who want a few private bedrooms, a garage, and access to a yard—a popular perk for many families.

No Condo Fees. One of the main advantages of a freehold townhouse is that there are no condo fees to pay every month. This can be beneficial for those who can’t afford condo plus HOA fees or prefer not to pay them each month.

Better Resale Value. A freehold townhouse can have better resale value than a condominium because it’s owned by the resident or owner. Some buyers prefer this type of living situation because they don’t have to worry about paying fees or having their rules changed according to what the condo board decides.

Freehold Cons

Higher maintenance cost. Owning and overseeing your freehold townhouse comes with a lot of responsibilities, including maintaining the exterior, fixing the roof, and even cutting the grass which leads to higher overall maintenance costs. 

Remote from the city center. Townhouses can be built farther out from the city center, markets, and main streets because they require more space compared to a condo. This could be good or bad depending on your lifestyle choice. Some people prefer to live in a suburban neighborhood with lots of green space and quiet streets while others like to live in an urban environment with all the hustle and bustle.

Condo Townhouse: Pros and Cons

Owning a condo has both its advantages and disadvantages. The key to knowing if it is the right choice for you lies in understanding what you can expect from ownership.

Condo Pros

Lower purchasing costs. By far the biggest advantage of buying a condo over a single-family home is that it costs less. Not only are you not buying land, but there are also fewer structural elements. This can save you money on your purchase price as well as on insurance, taxes, and maintenance costs.

Lower maintenance requirements. Condo owners pay a monthly fee to the condo association, which covers all of the property’s maintenance needs both inside and outside their unit. This means they don’t have to spend any time or money on cleaning or repairs, which is a nice perk if they are busy or don’t know how to handle these tasks.

Amenities. Condo buildings can offer amenities that would be impossible for an individual homeowner to afford. These may include pools, gyms, and clubhouses which provide opportunities for socializing with neighbors and meeting new people. Be sure to review the condo bylaws or covenants to ensure that the use of these amenities is guaranteed before you buy.

Security. Many condo owners have secured entrances, locked doors, and video surveillance systems that help keep residents safe and secure at all times, which makes living in an attached unit better than living in a single-family home.

Location. You may want to live in a specific location but cannot afford a home there. Buying a condo could give you access to the location and lifestyle you desire while keeping your housing costs reasonable.

Condo Cons

Owner control. You will be subject to the rules and regulations set down by the condo board. This makes condo living less “independent” than owning a single-family home.

Limited privacy. You will have neighbors on all sides, and probably above and below as well.

Limited outdoor space. The outdoor area available to you is limited to your balcony or patio and any common area, such as barbecue pits, pools and exercise rooms.

Additional costs. The cost of condo maintenance fees will also be higher in comparison to the cost of maintaining a freehold townhouse, but this varies according to the size of the unit, quality, and other factors. For example, your monthly condo fees may increase when repairs are needed, or if amenities such as cable TV are introduced.

The Bottom Line

By now, you should have a better understanding of what it means to buy a condo vs a freehold townhouse. Each has its own set of benefits and drawbacks, and the differences between them will affect your future quality of life. 

As a homebuyer, you need to understand the key factors as well as the pros and cons. Consult other people who have experienced both types of living, explore resources with extensive information about buying or owning a townhouse, and ultimately do your research before coming up with a final decision. The good thing is that there are many ways to give yourself the winning edge with the right tools and information for your specific needs.