One question I often receive from my clients is “Should I buy a condo or townhouse in New York City? What is the better buy?”
Condos and townhouses are very different types of housing and difficult to compare. Largely, it depends on what you will be using the property for. Is this going to be your primary residence, strictly an investment property, or a mixture of both?
In Manhattan, the median sales price of a townhouse has risen 33% over the last decade from $2.7 million to $3.59 million according to data from the appraisal firm Miller Samuel. Condo prices have gone up 55.4% from $804,000 to $1.25 million.
Townhouses make up a relatively small portion of housing available in New York City and tend to offer more privacy and space along with more freedom to renovate and sublease etc. While you won’t pay monthly common charges, you are responsible for 100% of the upkeep and repairs.
Do you plan to rent it out for additional income at any point? If so, the bulk of renters in the city are looking for smaller, more secure apartments and generally avoid being on the ground level. This indicates that on a per-square-foot basis you are better off buying a small condo and renting it out instead of buying a large townhouse.
Do you plan to sell it for a profit? Some people argue that townhouses cost less than condos on a per-square-foot basis but don’t be fooled. Townhouse square footage is measured from the outside of the walls, where as condos are measured from the inside of the walls. If they were measured in the same way, townhouses would be roughly 15% smaller which would drive up the price per square foot. Lastly, even condos that are the same size as a townhouse may sell for more if they are on a higher floor. The views alone can be an amenity that increases the price dramatically.
There are many factors to keep in mind when you are looking at places to buy. Remember that if this is your home and sometimes usage is the greatest value. As long as your asset appreciates in value, your primary concern should be enjoyment and living in a home that suits your everyday life and brings you joy.
All the best,