If you’re a practicing physician or resident shopping for a new home, a condo or townhome might be the perfect fit for your busy lifestyle. Everyone knows doctors can work long and hard hours. When you finally have downtime, you might not feel like spending it on home maintenance projects. Condos and townhomes both give you the perks of homeownership without the responsibilities like lawn care, snow removal, and other upkeep tasks.
What’s the Difference Between a Condo and Townhome?
Both townhomes and condos are considered attached residents. Townhome owners usually own the exterior of the home and the land it sits on. Townhomes are governed by homeowners’ associations. To maint property values, HOAs enforce rules on fencing, exterior decorations, and other aesthetics. HOAs will charge monthly dues that cover insurance, garbage services, snow removal, and maintenance of common areas.
Condos are more affordable than townhomes because they do not include land ownership. The condo community collectively owns all the land, property exteriors and common areas. HOAs also govern condo developments.
Mortgages for Condos and Townhomes
Condos and townhome loans are more difficult to get approved for. The process involves more paperwork, stricter requirements, and higher interest rates. The reason is condos and townhomes carry more risk for lenders. Being attached to other units, the risk of damage increases.
Lenders assess the number of units in the community. If there are a lot of empty units, this affects property values. If you plan to use a physician mortgage loan, check with lenders first before you start your search. Although doctor loans are available for most condos and townhomes, it’s not always the case in certain cities and areas.
Condo and Townhome Value Appreciation
Data from the National Association of Realtors (NAR) based on sales prices of existing properties from 2010-2016 noted the average appreciation of single-family homes was 4.7 percent. Condos averaged 3.4 percent.
In addition to lower appreciation, it’s difficult for owners to boost property value through updates. Condo and townhome owners must adhere to HOA rules which can limit upgrade options, especially on the exterior of a property.
Although detached homes offer more freedom, reports suggest condo values may be increasing faster than traditional homes in some markets. Data cited from Trulia’s automated valuation model showed that condo values in the 100 largest markets increased by 38.4% from February 2012-2017. The same data showed that the value of detached homes appreciated at 27.9% during the same period, giving a significant edge to condos in those markets.
Which One is Right for You?
Condos and Townhomes can be a great choice for young doctors without a family. For busy physicians that aren’t spending a lot of time at home, condos and townhomes provide more space and freedom than an apartment, without the responsibilities of homeownership. Townhomes are a step closer to homes compared to condos, so it really comes down to your lifestyle and short and long-term goals.
