Before I start this discussion, I do want to address my bias first. At the beginning of my real estate career, I was all for houses, mainly because of the resale value (I have an accounting background and I look at numbers first and foremost). Now, I have realized that even though condos don’t have the greatest resale value, for some people, they might be the best option. So, in this article, I will show you monthly expenses for an average house vs. an average condo and then we will talk about some of the pros and cons of buying a house and a condo for a full discussion that involves both numbers and qualitative factors.

So, let’s compute some numbers! Whenever we do any computations, we have to make certain assumptions about inputs being used in the calculation. In this case, we will make assumptions about interest rate, downpayment, average utilities etc. which may differ from actual numbers from house to house and from condo to condo. With that disclaimer, I have calculated the monthly expenses for an average house price in 2018 of $322,000 and an average condo price of $239,000.

house vs condo

I will let you make your own interpretations from the numbers as to what is the best option for you financially. For an average price, condos are definitely cheaper but are they significantly cheaper as people expect – I am not too sure!

Let’s dive into some qualitative factors for both buying a house and a condo. Both have their pros and cons and the living option that is the most suitable for you would depend entirely on you as a person and to some extent, the life phase you are in.

House

Pros

Space: Houses allow for extra indoor and outdoor space, which is more conducive to accommodating families, children and pets. Houses also feature more storage space in closets, attics or basements, so with larger families, condos may not provide sufficient space.

Privacy: Houses provide more privacy as there are no neighbors to worry about. You can listen to your music as loud as you like, you can cook whatever you like and won’t expect a knock.

Backyard Space: You rarely get a personal yard with a condo, which is one reason why some people prefer houses. While a yard does mean a lot of work, there is room to play and space for the dog to run.

Make it Your Own: You can do whatever you like in a house and you don’t have to seek anyone’s permission. You can paint, put up walls, remove walls, change blinds, decorate etc. which could be very limited in some condo buildings.

Community Feel: A suburb sometimes has a more community feel than a condo. So, if you are looking for a community feel, buying a house in a close knit neighborhood might be the solution. Condo buildings on the other hand may feel like living in an apartment.

Cons

Money Pit: Houses can be money pits and in all honesty they kind of are. There is always something that could be changed or repaired or made better. There is always something in the house that is needing work. Every summer, people spend a ton of money for their backyards, which is never added to the cost base of the house.

Maintenance: A homeowner is completely responsible for all maintenance inside and outside the property, including care and upkeep of the yard and trees. You must also consider buying extra equipment and tools for maintenance when you purchase a house. Houses require lot of time and money investment and there is always a long checklist for every season.

Inflexibility: If you travel a lot for work, buying a house might not be ideal as you will have to find someone to house sit when you are away. It is easier to break into a house than a condo building, so there is always a worry that someone might break in if the house is vacant for too long.

Condo

Pros

Location: Condos are usually located in urban areas and within walking distance to shops, restaurants and other places of interest. For some people, the convenience of a location close to work outweighs any other cons related to condos.

Amenities: Some condos provide great amenities such as pools and fitness centers, that would be cost-prohibitive in a house. It might be an important feature when deciding whether to buy a house or a condo.

Low-maintenance Lifestyle: Condos appeal to people who don’t want to spend their time or who don’t have the time to shovel snow, cut grass, do the up-keep of the house etc. Condos allow for a flexible lifestyle, especially for people that travel for work and for leisure a lot.

Cons

Condo Fees: One of the major drawback of condos is the condo fees. The average condo fee in Winnipeg is around $400 to $450 per month. The other big con is that condo fees usually go up every year in order to keep up with inflation, increasing cost of labour and materials and to account for wear and tear on the building as the building ages.

Special Assessments: There is always a risk of special assessment outside of the condo fees for unexpected costs and repairs. Most condos have a reserve for unexpected costs, however sometimes it is not enough to cover the actual cost in which case, all the unit owners will have to pitch in and pay.

Condo Board: Condos are run by condo board made up of unit owners who volunteer their time. Most of the people on condo board have no management experience and yet they are responsible for running the affairs of the condo building and the decisions made by the condo board are binding on all unit owners whether they agree with it or not.

Rules and Restrictions: Condos usually have restrictions on pets, smoking, decorations and renovations within the unit and the outside walls. I know some condos don’t allow unit owners to hang anything on their doors or put shoes outside their unit which might feel very restrictive to some.

Parking: Due to the location of most condos, parking is always an issue. It is difficult to get more than one space for parking and even difficult to have people over, as there is usually no assigned parking that visitors can use.

This is by no means a comprehensive list – I can definitely think of many more advantages and disadvantages for each.

In closing, financially, it is better to buy a house as it will pay off in the long run especially when it is time to sell. There are lot of good houses available in the $250k-280k range in very good neighborhoods. On the other hand, if you travel a lot, want to be within the walking distance to the hustle and bustle of the city and cannot imagine cutting grass or shoveling snow, then condo might be a great option. When my clients want to buy a condo, I always advise them of the poor resale value and ensure that they realize, condos don’t appreciate much in the short term. Most of my clients buy condos due to a lifestyle choice and they are okay with not getting the appreciation similar to a house.

So hopefully, this discussion was helpful if you are confused about buying a house or a condo. If you are looking to buy a condo or a house in a certain area and want to chat about the resale values, feel free to reach out to us and we would love to help you out!