Among those who are new to Atlanta, as well as those who are first-time homebuyers, the question commonly comes up as to whether it is better to buy a condo, townhome or house. Is there an advantage to owning one over the others from an investment standpoint? Should one or more of these options simply be avoided?
Understanding the legal differences
As far as making your home in Atlanta, there are advantages and disadvantages to each type of property, and the choice of which to buy really depends on your priorities and preferences. The same holds true from an investment standpoint, although it helps to understand the difference between them as far as legal descriptions are concerned, so you have a better grasp on what you are actually buying with your money. Below is a brief overview of the differences between a condominium, townhome and house.
A condo is typically an apartment-like unit with walls, ceilings and/or floors that are shared with other similar units in one larger structure. A condo can also have a multi-level structure similar to that of a townhome. However, the defining characteristic of a condo is that all you are purchasing is the airspace. You do not own the walls, ceilings or floors, nor the land on which the condo is built; these are owned by the condo community or association. Your condo fees are paid in addition to your mortgage, and those fees go toward things like taxes, maintenance and amenities. Condos today (particularly the high-rise variety) are popular with young professionals who like the urban lifestyle and plenty of amenities. The downsides are that some banks are limited in the type of financing they offer for condos, and condos can be difficult to resell because they cater to a specific type of need.
A townhome is similar to a condo, with a few exceptions. First, a townhome usually has more than one floor. Second, it shares walls with neighbors, as well as a shared roof, but but has no units above or below it. Third, and most importantly, a townhome typically includes ownership of the land beneath it, which is important from both a tax and equity standpoint. The property around the townhome may be community property, but you actually own land, not just airspace. Townhomes offer a variety of amenities which may be covered by HOA fees, and they are great for people who want an urban lifestyle without the added pressure of a lot of yard maintenance.
A house describes basically any single-family residence that sits on its own lot, meaning you own the land and everything that rests on it. Houses are more expensive than condos or townhomes for this reason, but they also give you more autonomy and control. Houses may sit in subdivisions that are governed by a community HOA (including fees, rules and covenants), but the house and land are yours. Along with this ownership, of course, comes responsibility for maintenance and upkeep costs that condo and townhome owners usually do not have. Houses are also generally the easiest to finance and sell.
Should you buy a condo, a townhome or a house?
It depends on what you want from your property. If you do not want the responsibility of upkeep, a condo might be right for you. If you are more concerned with overall control and equity in a piece of land, and you do not want to pay for amenities, you might prefer a house. If you fall somewhere in between, a townhome might be perfect for you.
Atlanta Fine Homes Sotheby’s International Realty can offer additional guidance as you decide whether to buy a condo, townhome or house in Atlanta. To learn more, call us today at 404.237.5000.