Should Your First Home Be a Condo or Townhouse?

Jun 24

Buying your first home is a huge deal, and it can feel overwhelming with all the choices out there. You’re probably wondering if you should jump straight into a detached house or start smaller. Lately, a lot of first-timers are looking at condos and townhouses as a way to dip their toes into homeownership without diving into the deep end. If coughing up half a million for a single-family house sounds crazy, a condo or townhouse might be more your speed. Let’s break down the pros and cons of starting with a condo or townhouse!

Condos vs. Townhouses: What’s the Difference?

Before we hit the pros and cons, let’s quickly clarify what we mean by condos and townhouses:

Condo (Condominium): Think of it like an apartment you own. You own your individual unit’s interior, and everything outside (hallways, roof, amenities) is shared with your neighbors and managed by a homeowners association (HOA). You pay HOA fees so they handle the exterior maintenance, common areas, maybe a pool or gym, the works. You get your own space without having to manage the entire building.
Townhouse: A townhouse is more like a mini-house that’s attached to other houses in a row. You own the inside and outside of your unit, often multiple floors, maybe a small yard or garage, but you share walls with your neighbors. Some townhouses are in communities with HOAs (especially newer developments), but not always. Even with an HOA, townhouse fees might be lower since you’re taking care of more of your own maintenance (like your roof or yard) compared to a condo.

In short, condos: you own a unit and pay a fee for upkeep of common stuff. Townhouses: you own the unit plus land, with possibly a smaller fee (or none) since you handle more yourself. Both condos and townhomes are typically less expensive than a stand-alone house and can be great starter homes for different reasons.

Pros of Buying a Condo or Townhouse as Your First Home

So why do so many first-time buyers go for condos or townhomes? Here are the big advantages:

More Affordable Entry Point: Let’s face it, houses are expensive! Condos (and many townhouses) usually come with lower price tags than detached homes in the same area. For example, at the end of 2020 the median condo price was around $272k, while a single-family home was about $314k. Townhouses generally cost a bit more than condos but still less than a comparable detached house. If you’re struggling to afford a house or just want to stop throwing rent down the drain, a condo or townhome can get you on the property ladder without breaking the bank.
Lower Maintenance Hassles: One huge perk of condo living, you won’t be mowing lawns or fixing the roof on the weekends. The condo’s HOA usually handles all the exterior upkeep, think lawn care, snow shoveling, exterior painting, roof repairs, you name it. Even many townhouses offer reduced maintenance; if there’s an HOA, it might cover things like landscaping or snow removal in the community, while you handle just your unit’s upkeep. Either way, you’re dealing with a smaller space than a full house, so there’s less to maintain overall. This is awesome if you’re not handy or you’re just busy. You can spend your time enjoying your home, not constantly repairing it. (Bonus: condo owners often pay less for things like building insurance and property taxes since the space is smaller.
Amenities and Perks: Many condo complexes come with amenities you probably wouldn’t get in a starter house. We’re talking pools, gyms, BBQ areas, maybe even a concierge or security patrol. It feels a bit like resort living when you have a hot tub and fitness center a few steps away. All that is typically covered by your HOA fees, so you don’t have to worry about maintenance; you just get to enjoy. Townhouse communities might offer fewer shared amenities (you likely won’t get a rooftop pool with a townhouse), but you often gain some private perks instead: your own garage, maybe a small yard or patio to grill on, and nobody living above or below you.
Convenient Locations: Condos are often located in prime spots, think downtown or hip neighborhoods, where standalone houses cost a fortune or simply don’t exist. If you want to be close to work, nightlife, or public transit, a condo can put you right in the action. Townhouses can also be in convenient areas, especially in cities or close-in suburbs, often giving you a nice balance: you might be near shops and schools, but with more space than a high-rise condo. Basically, with condos and townhomes, you can often live where you want, not way out where you can afford a house. Less commute, more convenience.
Built-In Community (Social & Security): Living in a condo building means neighbors are close by, which can be comforting. There’s often a built-in community, maybe you chat in the halls or at the pool, and some complexes host social events. For a first-time buyer (especially if you’re moving out of a rental apartment), this feels familiar and can help you make friends in a new area. Townhouses offer a bit more privacy, but you still have neighbors next door and a community vibe (just without everyone in the same building). Also, condos sometimes have secure entrances or gated parking, and neighbors tend to notice unfamiliar faces. It’s harder for sketchy stuff to go unnoticed in a close-knit complex. In a townhouse or condo community, you kind of watch out for each other, which can add a sense of security.
Ease into Homeownership (Learning Curve): Owning a home comes with a lot of responsibilities, but with a condo or townhouse you ease in a bit more gently. The HOA’s got your back on some of the big stuff, and there’s often a management company to call if something goes wrong outside your unit. It’s a nice way to learn how homeownership works (mortgages, taxes, maintenance budgeting) without immediately having to deal with every little issue a standalone house could throw at you. Plus, since you’re paying monthly HOA fees, you get used to budgeting for home expenses in a predictable way. It’s kind of like training wheels for owning a home; you get independence, but you’re not totally on your own.
Building Equity and Future Moves: The biggest reason to buy anything rather than rent is to start building equity. Condo or townhouse, you’ll be paying yourself (in the form of equity) instead of a landlord. Over time, as you pay down the mortgage (and if property values rise), you build wealth. You can later sell and use the equity toward a down payment on a bigger place (maybe that dream single-family house down the road). Condos and townhomes typically appreciate in value, just not always as fast as standalone houses. But hey, some gain is better than none, and often the lower purchase price of a condo/townhome lets you actually get into the market years sooner. In hot urban markets, condos can appreciate nicely too, especially if the location is prime. Bottom line: it’s a starter home that can set you up for the next step.

Cons of Choosing a Condo or Townhouse

Alright, now for the flip side. Condos and townhomes come with some trade-offs and drawbacks you need to consider. It’s not all smooth sailing and free gym use. Here’s the scoop on the potential downsides:

HOA Fees (Monthly Dues): Buying a condo or a townhome often means joining a Homeowners Association and paying monthly HOA fees. This fee could be a couple hundred bucks a month (or more), on top of your mortgage. That can sting, especially for budget-conscious first-timers. The HOA fee does cover stuff, maintenance, amenities, maybe water/trash and insurance on the building, which are expenses you’d pay in a house anyway. But you’ve got to pay it no matter what, and HOAs can and do increase fees over time. If the building needs a new roof or the townhome community wants to repave the parking lot, guess what? Everyone’s fees might go up, or you might get hit with a special assessment (an extra bill) to cover those big projects. In a house, you decide when to spend on upgrades; in a condo/townhouse, the HOA decides, and you split the bill. Always look at the HOA fee and what you get for it; if you’re paying for a bunch of amenities you’ll never use, that’s money down the drain.
HOA Rules and Restrictions: Those HOAs don’t just take your money; they make the rules. When you buy a condo or a townhouse in a governed community, you agree to follow the HOA’s rules (often called Covenants, Conditions & Restrictions or CC&Rs). These rules can cover anything from pet sizes to what color you can paint your front door. Want to blast music at 2 AM, install neon-purple Christmas lights year-round, or rent out your place on Airbnb? There’s probably a rule about it. Some HOAs are relaxed, others feel like overzealous hall monitors. The point is, you give up a certain amount of freedom compared to owning a house with no HOA. If you’re a very independent type who hates being told what to do with your property, this could drive you nuts. Make sure you read the HOA rules before you buy, so you don’t end up in a constant battle with the condo board over your pet iguana or your desire to BBQ on the balcony.
Less Privacy and Space: Condo living means sharing walls, and maybe floors/ceilings, with neighbors. If someone above you has lead feet or a home theater subwoofer, you’re going to know about it. Townhouses usually eliminate the people-above-and-below issue, but you still share side walls. And generally, these homes are smaller than detached houses, often with no private yard (or a tiny one). That might not bother you if you’re used to apartment life. But if you crave space or silence, the close quarters can be a downside. In a detached house, you can blast your music, have friends over on the back deck, or let the dog run in the yard without worrying about disturbing a neighbor (or a neighbor disturbing you). In a condo or townhome, you’ll need to be a bit more considerate and tolerant. It’s communal living to an extent, part of the bargain for the convenience and lower cost.
Limited Customization: When you own a single-family house, you can generally do whatever you want (within local code and permit rules, of course), paint it neon green, build a fire pit, remodel the exterior, you name it. In a condo or many townhome communities, your freedom to renovate or change things is limited. You usually cannot alter the exterior of a condo at all (you don’t own it exclusively), and even in a townhouse, the exterior look might have to stay uniform. Want to add solar panels or a new fence? You’ll likely need HOA approval. Even interior changes in a condo could require permission if it affects structural elements or plumbing/electrical systems that serve the whole building. Basically, you might feel like it’s your place, but you can’t fully treat it like your castle. If you have a grand vision of customizing your home, a condo/townhome could be frustrating.
Resale and Appreciation Considerations: We mentioned building equity, and that’s true, but it’s also worth noting that condos (and some townhouses) don’t appreciate in value as quickly as single-family houses in many cases. The condo market can be more volatile. For example, if the building’s HOA has financial issues or there are a bunch of units for sale at the same time, it can hurt your resale value. Buyers might be wary of high HOA fees or a poorly run association, and some lenders are stricter about lending on condos (they look at the building’s health, not just your finances). Townhouses tend to track closer to single-family homes on appreciation, especially if you own the land, but they still could be harder to sell than a detached house if the market is flush with similar units. Also, when it comes time to sell, you’re competing with possibly many similar units for sale in your complex or neighborhood. If you bought a one-bedroom condo, your buyer pool is limited (first-timers, singles, investors), and that can make resale tougher. If this is truly a starter home, keep resale in mind. You might outgrow a condo faster, and you don’t want to be stuck or have to sell at a loss. Choose a place that will be reasonably easy to sell later (good location, well-run HOA, at least two bedrooms if possible).
HOA Dynamics and Drama: This one’s a bit intangible, but anyone who’s lived in a community with an association knows it can be a mixed bag. You’re essentially in a business partnership with all your neighbors. If the HOA board is competent and the neighbors are cool, great, your life will be smooth. But if you get stuck with nasty or nosy neighbors on the board, or incompetence in managing funds, it can be a nightmare. HOA meetings, disagreements over pet rules or parking spaces, debates about raising fees for a new lobby renovation, it’s all part of the package. You have to be okay with a bit of politics and group decision-making. In a house, you’re the king/queen of your domain. In a condo or townhome, it’s more like being in a cooperative club, you have to play nice with others and compromise at times.

Final Thoughts: What’s Right for You?

At the end of the day, choosing a condo or townhouse for your first home is about trade-offs. You get an affordable, low-maintenance place to call your own, often in a great location with cool amenities. You’ll start building equity and learning the ropes of homeownership without immediately drowning in upkeep and expenses. For a lot of people, that’s a pretty great deal, it’s why condos and townhomes are popular starter homes.

On the other hand, you have to be comfortable with the rules, fees, and close neighbors that come with these types of homes. Some folks just need that big yard, total privacy, and the freedom to put a hot tub in the backyard without asking permission. If that’s you, you might chafe at condo/townhome living. But remember, you can always start with a condo or townhouse now, enjoy the benefits, and later leap into a detached house when life (and budget) allows.

Bottom line: There’s no one-size-fits-all answer. If you value convenience, location, and a lower cost of entry, and you don’t mind paying a fee for some help and playing by the community rules, then a condo or townhouse can be an awesome first home. It’s a chance to own something in an era where owning a single-family house right off the bat is out of reach for many. Just do your homework, check those HOA finances and rules, chat with a few neighbors, and make sure the vibe fits what you want. Then, jump in and enjoy having a place that’s truly yours. Homeownership, here you come!