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Choosing & Insuring: Detached Home vs. Townhouse vs. Condo

In this red hot sellers’ market, many first-timers are being outbid multiple times. Some are using new strategies to win. Some are adjusting their expectations.

A single detached home is generally more expensive than a townhouse in the same area with similar finishes and square footage. Condos typically come next, with less space and common areas instead of yards and thus an even lower price tag.

But should you shift your focus based on price alone? Or are there other factors to consider between the three options? There is no right type of home for everyone. Choose what works for your current needs, future plans, and budget.

And of course, once you choose, ensure you protect your investment with the right insurance policy.

Choosing a detached home

There is a reason single detached homes are generally the most expensive type of home to buy. Most have bigger yards and land is expensive. Do you plan on gardening, entertaining outside, or letting a dog run loose?

With no shared walls, floors, or property, you can typically expect more privacy. Is it important to you to have your own space? Does hearing a neighbour walk around or play music disturb you?

If you’re thinking of starting a family (or perhaps you already have), a single detached home gives you room to grow. Many larger townhouses offer this benefit too. However, it’s much easier to find a house with 3+ bedrooms for those with big family dreams.

Insuring a detached home

You’ll need a homeowner’s insurance policy to protect a single detached home. It will provide coverages that will in the event of a claim, replace: your house, detached structures like sheds and detached garages, as well as living expenses if you need to temporarily move out. You also receive liability insurance.

Your agent should take the time to price out your insurance based on an assessment of what it would cost to rebuild your home.

Choosing a townhouse

Attached units can be a great in-between option for families looking for more space than a condo at a lower price than most single detached homes. Plus, there are a lot of other benefits.

With shared walls, property, and sometimes floors, you’ll be in closer quarters with your neighbours. Not just an opportunity to socialize, you are more likely to notice when something is out of the norm. Some buyers opt for this peace of mind over more privacy.

Do you prefer not to do yard work? A townhouse may be for you. Many townhouse complexes charge a small fee for maintaining all yards and common areas. The aesthetic throughout the neighbourhood is nicely uniform, and the owner spends less time on maintenance. If you do enjoy the outside work and would rather not pay a fee, a freehold townhouse is for you.

Insuring a townhouse

Freehold townhouses work the same way as detached homes. You protect your new investment with a homeowner’s policy. If it is not freehold but instead under a condo corporation, a condo policy is what you need. We’ll delve into condo policies more in the next section.

Choosing a condo

Many young people are opting to start families later in life, eliminating the need for extra bedrooms. If there are no plans to grow anytime soon, a condo can offer an efficient and vibrant lifestyle.

Do you love being able to walk most places and access the best public transit routes? You may even be able to save money by ditching your car. Do you like the idea of being near great dining and entertainment? You can live the city life for a much lower price tag by going the condo route.

With a smaller square footage, condo living forces the minimalist lifestyle. You’ll spend less on furniture, clothing, and other items. Would you rather focus on saving or spending that extra money on vacations and experiences?

Similar to a townhouse, maintenance of the common areas is taken care of with your monthly condo fee. Just make sure you factor this into your budget before you buy, and leave room for annual increases.

Insuring a condo

While the condo corporation has an insurance policy that covers some aspects of the building, each owner should have a condo insurance policy of their own. The condo corporation’s policy does not cover the interior of each individual condo, the condo owners’ possessions, or the condo owners’ liability.

Since what is considered the interior of the condo varies by building, make sure you check the condo declaration pages. The general rule of thumb is that the interior refers to things you can touch, like flooring, cupboards, and counters. You’ll need your own coverage for those things, but not for plumbing, studs, and ducts.

Who can you ask for advice?

If your townhouse or condo has a condo corporation, check with them about what is covered. Then, speak to an insurance agent you trust about ensuring you’re fully covered. Our agents are always happy to answer your questions, even if you are not yet a policyholder. Best of luck in your home search!