House or Condo – which to buy?

Which costs less to buy – a condo or a house? Well, that is certainly a tricky question which really has no definitive answer. But let’s look a little deeper into this question.

Buying a Condo

As a rule, you can purchase a condo for less than a similar size home. And that’s because it costs less to build condos. When building a condo, you can construct more homes per acre. This also means less roads to build, some walls can be shared and more. So in terms of the sale price of a condo cs a similar home, a condo will usually cost less.

But what if you’re looking at the monthly costs, instead of the basic purchase price? That can certainly change the equation.

Monthly Costs

Some monthly expenses will be the same in either a condo or a house. Taxes, homeowners insurance, utilities and the mortgage will need to be paid on either. Let’s examine these costs a bit further.


Quite often, but not always, taxes on a condo will be less. That’s because the taxes are calculated upon the square footage of the building and the size of the lot. But other factors come into play.

Homeowners insurance

Your cost of homeowners insurance is usually lees for a condo. That’s because the association’s policy covers their interests, which are usually the roof and the siding, plus exterior liability.


These will usually be very similar.

Mortgage Costs

Ah – we finally hit the spot where there can be a major difference. If you purchase either a condo or a house for $300,000, your mortgage costs, principle and interest, should be the same. But here’s the difference. With a condo you’ll be paying a monthly homeowners association fee. These fees can easily cost between $200 – $300 per month, or more. Let’s look at the numbers.

If you purchase a house and don’t need to pay homeowners association fees, you’ll save that amount. But what if you took that amount and used it to buy a nicer home? If a condo has a $200 per month fee, at today’s interest rates of 3.5%  you can spend $44,600 more for a house and have the same monthly payment!

Do you think you can find a nicer home for 15% more? Probably so.

The Negatives

All is not sunshine and rainbows. You will give something up when you buy a house instead of a condo.

In a condo, that homeowners association fee takes care of things that you won’t get with a home. Things like lawn cutting, snow removal, garbage collection and exterior maintenance of your home. As a homeowner, those costs will fall on your shoulders.

If you’re okay with cutting the grass and shoveling snow, great. I think it’s a small price to pay to own a house. Garbage collection will cost around $30 per month, and some towns offer municipal trash pickup that is paid by your taxes. But if you need a new roof or siding, that can get expensive.

Bottom Line

You can probably buy a nicer home than a condos with the same monthly cost. But consider all factors into your decision.

Either way, when you’re ready to buy, call us. Call Bunny and Art Reiman – Realtors. And if you need to sell a home, we can help with that also.

Would you like to search for homes in other Monmouth County towns?

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