Picking Your First Home: House, Condo, or Townhouse?

Buy House Picture

Someday, I will reach the stage where I will need to consider what kind of home would I want for myself and my future family.

While a large and significant life decision like a home purchase obviously requires a lot of thought and incorporates a complex buying process, the basic gist of choosing the perfect deal for you comes down to just a handful of questions. The biggest one is – what kind of home should you get in the first place? Just take a look into property portal like PropertyGuru and you will find yourself in a sea of different types of property for sale in Malaysia.

To choose your first home, you have to take a look at your family, your means, and your immediate future – and with a few basic questions, some key pointers, and a couple handy tips, you’ll be able to breeze through not just the process of picking one among the three, but picking the one, the actual home you’ll be living in.

Understand the Difference

First and foremost, it’s important to actually distinguish between a condominium, a townhouse and a house. While the differences are obvious, there are a few subtleties – especially in ownership. For example – while you know the difference between a house and a condo, what’s the difference between owning a condo and renting an apartment, aside from a larger one-time payment rather than monthly installments on a lease? Or how are houses and townhouses really all that different?

Condominiums

To begin with, let’s take a look at condominiums. Condominiums began as a trend in Europe and North America in the 19th century, with the first American condo being built in Manhattan, according to Condopedia. They’re defined as large community-owned properties. Each unit within a condominium is owned by a single owner, and optionally rented out to a tenant (or several tenants), but each owner also shares the costs and liability for a percentage of the building’s common space – that includes its amenities, hallways, elevators, and so on and so forth.

Once you go past that, however, you get a closer look at what the costs are. While you have to pay a single fee to buy the condo, you’ll also be faced with condominium fees on a monthly basis. These replace what you’d usually pay on a monthly basis for the upkeep of a home. Instead of swinging around the side of a twenty-story building with a bucket and a mop, though, your monthly fees go towards regular maintenance and upkeep for the entire building, together with the monthly fees of every other condo owner in the building.

However, aside from the costs for common area maintenance, you’ll also pay a monthly special assessment fee, which goes into a condominium’s reserve fund and is used in the case of a serious repair – such as a broken sewer pipe, or a broken HVAC system.

Houses (terraced, bungalow, semi-D)

When you’re the owner of a home, the responsibility for the home is yours entirely. If you’re paying off a mortgage, chances are that your lender will have to pay a certain amount to a home insurance company with the lender as an escrow account, so that in case something happens and you’re unable to continue paying off your mortgage, your insurance can partially cover the lender for their costs.
Additionally, property taxes and maintenance fees – or the time it takes to clean and trim the house yourself – all has to be accounted for when making a purchasing decision regarding a single-family house. You’re not just buying the four walls – you’re buying the lot and land, as well, and that makes it all yours. Whereas a condominium might be great for a young couple or an older couple years after their children have moved out, a larger family with kids might find it better to move into a house because of greater yard and floor space.

Townhouses

When you can’t afford an executive condo, much less a house, getting a townhouse is a great alternative. A good way to think of a townhouse is to take the condo and the house and to create a hybrid of the two. A townhouse complex is still a community project, with its own common areas and associated costs, yet each house itself has one actual owner. Each house might come with its own little porch, yet you won’t get much of a yard, if anything outside of the walls of the townhouse. For couples and smaller families, this is actually great news.

In the end, much of the decision comes from your budget and your family size. If you’re a couple, a condo might seem like a great investment – yet young couples often quickly become small families, and these are often more appreciative of a house. In that case, you could save money by renting a condo for the short term, before moving into a house of your own. Or, you could skip both, and decide on a townhouse in a nice neighborhood.

The Verdict

You will likely find yourself struggling to find the property that best suit your needs especially when Malaysia’s property for sale is mushrooming at an incredible pace. Personally, an executive condo does have a nice tiered security that makes us feel much safer but the trade off will be a smaller space. If you have sufficient budget, a fully gated houses will be the next best option when you can get both space and safety in one single package.