Condo Townhomes v.s. Freehold Townhomes
Tuesday Sep 11th, 2018Share
Thinking of buying a townhome in the GTA? I’m sure you have heard that there are a few options that come with this decision. Well, let’s get you up to speed with the most obvious difference, condo or freehold?
In the GTA, there are two types of townhome ownership.
First is a condominium or strata ownership. In condo ownership, you own the interior of the property, just like a regular condo, and you share ownership of outside of the building, yard, parking area, and common areas. Condo townhomes now are offered within a townhome community or a newer option is as part of a condominium building community.
Alternatively, some townhomes are freehold townhomes. With a freehold townhome, you exclusively own the land your townhome sits on and the dwelling itself, both inside and out.
In most cases, choosing between a condo townhome and a freehold townhome depends on which option is right for you?
The pros & cons of condo townhomes
The benefits of condo townhomes
1) No Hassle Maintenance
A condo corporation or homeowners’ association (HOA) governs most condo townhomes. You are required to pay monthly condo fees to the condo corporation. The condo fees cover the cost of snow removal, lawn care, and maintenance of the common areas. Sometimes utilities, like a water bill will be covered. It depends on the condo board.
2) Value Remains Unaffected
Since all homeowners in the condo complex pay condo fees, the exterior of their units will not fall into disrepair and negatively affect the resale value of the other units.
3) Purchase Price
Condo townhomes tend to be less expensive. There tends to be an inverse relationship between the maintenance fees charged and the price.
The cons of condo townhomes
1) Reduced Flexibility
Condo townhomes owners are subject to the bylaws of the condo corporation, which may have rules about changes you can make to your unit, fixtures you can install in your backyard, or even how to decorate for holidays.
2) Monthly Fixed Cost
Condo townhome owners must pay condo fees every month, even if you don’t use the common space amenities
3) Unexpected Costs
If the condo corporations reserve fund is poorly managed you may be levied a special assessment which is a one time fee to pay for repairs and maintenances. The repairs can be in the thousands of dollars.
The pros & cons of freehold townhomes
The pros of freehold townhomes
1) Increased Flexibility
Unlike a condo townhome, with a freehold since you own the interior and exterior of the home, you are free to make any changes you desire. Paint the exterior or change the windows, no approval required from the board.
2) Increase In Value
Due to the higher demand for freehold townhomes than condo, freehold townhomes have a increased value and appreciate at a more rapid rate.
3) Lower Maintenance Costs
Due to your flexibility with this type of townhome, you can choose who to use for your property maintenance and also decide when it should be completed. You have more control on your maintenance costs.
The cons of freehold townhomes
1) Increased Responsibility
The value of your property and its appreciation is now your responsibility. Therefore you are responsible for all timely repairs and maintenance unlike in a condo townhome.
2) Less Say With Your Neighbours
If your neighbours are noisy, are not maintaining their property which is affecting yours as well, such as leaving garbage outside or if they want to turn it into a student rental … you will have less say. They own their property as much as you do!
3) More in Demand and More Expensive
Due to the flexibility and reduced fixed monthly costs being the most popular reasons, freehold townhomes are more in demand in the GTA real estate market than their condo townhome counterparts.
Make sure you speak to our team at MyTownhome to discuss and weigh the pros and cons. Our team is specialized to ensure they assist you choose the best option!