Home buying across Canada has become increasingly challenging, particularly for first-time home buyers. House prices have outpaced income, and those who have been eying a single-family, detached home are often discovering it isn’t financially feasible. The good news is that there are other, more affordable options available that will help you enter the housing market. One such example is a townhouse. 

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Key Takeaways

• The main difference between townhouse options is how ownership works. With a freehold townhouse, you own the home and its land. With a condo townhouse, you own the interior of the home only
• If you don’t want to shovel or perform general upkeep such as lawn cutting and leaf raking, a condo townhouse may be your best option
• If you want the freedom to make your house your own, including renovating the outside as you see fit without adhering to guidelines or seeking permission, a freehold townhouse may be your best option

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Different types of townhouses

There are two types of townhomes available – freehold or condominium (condo) style. Each offers unique features and benefits, so you’ll need to consider which type is right for you before moving forward. 

The main difference is how ownership works for each option. With a freehold townhouse, you own the home and its land. With a condo townhouse, you own the interior of the home only. Its land and surrounding areas are collectively owned by the group of condo unit holders, which, in turn, is managed by a condo corporation. 

What is a condo townhouse?

When you purchase a condo townhouse, you own the individual unit you live in, but not the exterior. The outside of your unit and common areas are owned by the condo residents collectively and maintained through monthly maintenance fees, or condo fees. If you aren’t one to undertake snow shoveling or general upkeep such as lawn cutting and leaf raking, this is a great option for you. Your condo fees will also cover significant expenses such as replacing faulty windows or a damaged roof. 

Monthly fees from all residents are kept in a reserve fund for future expenses. You’ll want to determine whether there’s a healthy amount of money in the fund prior to buying to help you assess whether the property is well run.

The cost of buying a condo townhouse is typically lower than a freehold, which makes it an attractive option. While housing prices have increased across the board, a condo is still a viable option for many would-be buyers. When looking at your budget, make sure you factor in the amount of your monthly condo fees and keep in mind that they’ll likely go up incrementally over the time you live in the house.

Condos are governed by a board of directors who work with the condo corporation to oversee its overall operation. Because you don’t own the exterior of your home, you’re not free to make any changes or improvements without permission from the corporation and, even then, you’re limited in what you can do. If you want to replace your fence, for example, you can’t simply do it yourself. The corporation would have to determine that all fences under their management would need to be repaired or replaced. 

Some condo townhouses offer shared amenities such as pools and gyms, which you may not otherwise be able to afford. In addition, the communal areas and shared ownership offer a real sense of community living.

Tip: If you want extra amenities, such as a gym or pool, but don’t wish to maintain them on your own, make sure you purchase a condo that includes access to these perks.

What is a freehold townhouse?

A freehold townhouse is similar to a detached home in that you own the physical house and the property it sits on. You are, therefore, responsible for all improvements, repairs and maintenance – inside and out. 

Freehold townhouses are typically attached to other houses, on one side or both. Despite being physically attached, you still have the freedom to make your house your own. You can renovate the home as you see fit without adhering to guidelines or seeking permission. You’re also responsible for your own snow shoveling, grass cutting and any landscaping you wish to do. 

Something to keep in mind, however, is that you have no control over how your neighbours care for and maintain their property, which may not be the same as your standards. 

A freehold townhouse doesn’t carry monthly maintenance fees, which means that if something goes wrong, or you encounter a significant issue such as a leaky roof, you’re responsible for the repairs and associated costs. 

In general, there’s more demand for a freehold townhouse than a condo townhouse, which means prices tend to be higher. Keep in mind, however, that they also appreciate in value at a faster pace than a condo, which is good for when you decide to sell.

Tip: Since there are no monthly fees with a freehold townhouse, you can control the extra money you set aside to offset ongoing maintenance costs.

Condo townhouse pros & cons

The biggest pro revolves around such things as general upkeep including lawn cutting and snow shoveling. Your condo fees will cover these tasks as well as significant expenses such as replacing faulty windows or a damaged roof thanks to a reserve fund that’s set aside to cover future expenses.

As well, it’s definitely a pro that the cost of buying a condo townhouse is typically lower than a freehold.

The third potential pro is that some condo townhouses offer shared amenities such as pools and gyms, which you may not otherwise be able to afford. In addition, the communal areas and shared ownership offer a real sense of community living.

The most significant con is that you can’t control how the outside of your condo or common areas look. 

As well, when looking at your budget, make sure you factor in the amount of your monthly condo fees and keep in mind that they’ll likely go up incrementally over the time you live in the condo. These fees can quickly add up, which is another potential con worth noting.

Freehold townhouse pros & cons

The biggest pro with a freehold townhouse is that, while they’re typically attached to other houses, on one side or both, you still have the freedom to make your house your own. You can renovate the home as you see fit without adhering to guidelines or seeking permission.

Another pro is that a freehold townhouse doesn’t carry monthly maintenance fees. As such, you can put extra money aside to offset the costs of such things as roofing instead of pooling funds into a condo reserve fund.

On the con side, a freehold townhouse is similar to a detached home in that you own the physical house and the property it sits on. You are, therefore, responsible for all improvements, repairs and maintenance – inside and out. Upkeep can be a large ongoing endeavor. 

Also a potential con is that you have no control over how your neighbours care for and maintain their property, which may not be the same as your standards. 

Finally, there is generally more demand for a freehold than a condo townhouse, which means prices tend to be higher.

Which townhouse is right for you?

Weighing the pros and cons above will help you determine which type of townhouse is right for you. Whichever option you select, townhouse living represents a great way to enter the housing market and acts as a steppingstone towards purchasing the home of your dreams down the road. 

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