Condo, Townhome, Duplex, Twin Home: What's the Difference?

If you are not buying a single-family home, you might face a dizzying variety of terms for homes that have several units in a building, or just one or two.

Buying a home in a community is often less expensive, with more amenities than you could get with a single-family property. Understanding the differences between condominiums, townhomes, duplexes and twin homes helps you to determine which type is ideal for your search.

1. Condominium

The conventional concept of a condominium is simply an apartment that you own. While this is a common arrangement for condos, it is not the only one. Condos can be located in a multi-unit building or be detached from one another. Some condos are structured vertically so that they look somewhat like townhomes.

The defining feature of condos is that they allow you to own the actual living space, and a portion of the property and amenities on the larger lot. Condo owners usually pay a fee, not unlike homeowner's association dues, for the upkeep on the buildings and landscaping on the community property.

2. Townhome

Although townhomes are often located in communities just like condos, they are not the same thing. When you buy a townhome, you own the structure of the building where the home is located and the property underneath it.

Townhomes may have small yards delineated by fencing to separate them. You typically have a lot of freedom to control what you do inside the home. However, you must get agreement from other owners in the building (or the community, if it is a series of buildings) if you want to change anything on the exterior structure of the building.

3. Duplex

Like condominiums, a duplex is considered a multi-family property. There may be two separate buyers, or there could be one buyer who purchases the entire property and rents out the other home as an investment. A duplex has two homes located in one structure, with one lot underneath.

The owners usually share control of the property and the exterior structure, much like a condo in a very small community. The co-owners must agree on exterior upgrades and improvements, such as paint colors, before the work can be performed.

4. Twin Home

Twin homes are perhaps the most independent of attached housing units. Like a duplex, a twin home is two homes in one structure. They may be mirror-image or not. Each owner owns their portion of the house and the lot underneath it. Unlike a duplex, twin homes have two separate lots. Unless you live in an area with community requirements, you are allowed to paint the structure and design the yard however you like.

You do not need the other owners' approval to make changes. Of course, since you still share an interior wall and close proximity, it makes sense to select improvements that are likely to increase the value of the home as a whole.

5. Co-Op Housing

When it comes to the actual dwellings, there are typically few differences between condos and co-ops. How a co-op home is purchased and owned, however, distinguishes it from other home types.

Unlike a condominium, a co-op is not considered rel property, as owners do not actually own the structure or the land. Instead, they purchase a share in the corporation that owns the property. When the buyer becomes a shareholder, they gain exclusive rights to use the housing unit in the property.

Because co-ops are not real property, the loans used to buy them are different from traditional mortgages, as well. Instead of a mortgage, the co-op buyer will take out what is known as a share loan. A co-op owner will make payments on the loan each month just like they would pay a mortgage. However, they will also pay their share of building maintenance costs, known as pro rata payments.

Despite these additional costs, co-ops can actually be more affordable than other property types. This is because co-op shares are sold at cost, instead of at a premium like condo units.

If a single-family home is not right for you, there are plenty of different options to consider. Buying an attached home could give you the ability to pay a lower price for a home in a nicer area. You might like the simplicity of a condominium, or the relative freedom of a twin home. Knowing the distinction allows you to more clearly express your preferences to your real estate agent before you go shopping.