Buying a home will likely be the most important purchase you make in your lifetime. That’s a lot of pressure. You need to get it right – both for yourself and your family. Sit down and carefully weigh the pros and cons of purchasing a house, versus a condominium or townhouse, before you sign a mortgage contract. Investing in a home after all is as much an emotional decision as a financial one.

There really is no set of rules when balancing one option against the other, but there are some important factors to consider.

Costs of buying a home

On average, houses and townhouses will cost more to purchase than condos. However, houses and townhouses will also appreciate more quickly.

In Toronto, for example, the average price of a house in September 2018 was around $1.2 million (depending on the size and neighbourhood) and a condo is around $735,000 for a two bedroom, says Paul Peterson of Blue Elephant Realty, based in Toronto’s King West neighbourhood.

“Houses have increased in price at a faster rate than condos over the last 10 years. You add instant value to a house by doing renovations, so the financial upside is usually greater on the purchase of a house,” says Peterson. Condos can of course be renovated but not to the same level as a house.

“If you can afford to buy a house, it usually makes sense to choose that over a condo,” Peterson says.

But there are other costs to consider beyond the purchase price, such as home maintenance costs, utility fees, and property taxes.

Monthly condo fees can be as high as your monthly mortgage payments, but at least if there’s a hole in the roof you won’t have to deal with a huge repair bill. Utilities are also often included in condo fees, but property taxes are typically extra. Property tax rates vary significantly across the country, with property tax on a million-dollar home in Vancouver in 2018 costing $2,468 a year, whereas in Halifax and Winnipeg, million-dollar homes have property taxes over $10,000 annually.

Room for kids and/or hobbies

Condo developers have done a much better job building for families with kids. But if you are planning to have more than one child, a house might be a better option. Three-bedroom condos are harder to find. Also, if you want green space for your children, a dog, or to build a garden, a house that provides a yard, or even a townhome that has some outdoor space may be a better fit. Penthouse condos, however, often offer entertainment areas and outdoor gardens.

Privacy

A condo lifestyle poses certain restraints when talking about privacy, especially if you have noisy neighbours. The same holds true when talking about a townhouse. In a condo building, you are sharing the common areas, like the gym or barbecue area. If you like to barbecue on your balcony, there are restrictions there as well. In townhomes and condos, you have to watch your noise levels. And if you smoke, more and more condo boards are making that more restrictive.

Lifestyle

Traffic is getting worse in urban areas across the country. Few of us like the idea of spending more time stuck in our cars when those hours could be put to better use. If you want to live downtown, closer to the action, a condo is often a better choice – even if it means giving up living space.

Houses usually need more care than condos. If you work long hours, or are older, and are looking for a lower maintenance property, a condo might be better for you. Most condos also have a concierge and more security, which can give you peace of mind when you aren’t home or if you live alone.

Finances

According to the Canada Mortgage and Housing Corporation (the Crown corporation that helps Canadians with all things housing-related), after looking at the pros and cons of each ask yourself if you are financially ready to buy:

• Compare how much you currently spend on expenses and debt payments with the amount you have saved or invested.
• How much can you afford to spend on housing each month without risking your financial health?
• How much do you need to save to pay for the upfront costs of buying a home?
• How much would you be spending each month on expenses, added to mortgage payments?
• What is your credit score? Your credit score shows your ability to pay bills and manage your debt

It is important as well to consider insurance coverage on whatever kind of property you buy. A home must be insured for the inside and outside, whereas a condo or townhome requires protection for the interior of the unit, with your condo fees usually covering the condo association’s insurance on the building and common areas.