SIR Logo

Call Andrew at 1 (855) 876-7334

Condo vs. House: Which is a Better Investment?

Portrait Andrew Schulhof

#303-1338 West Broadway
British Columbia
V6H 1H2

There are positives and negatives to investing in either a condo or a house but let's look at each of them and try to determine which is the better investment for you.

Lately, I have been asked several times about which type of property is the better investment, a house, or a condo. The answer is actually personal and more complicated than A or B. Both options come with unique advantages and drawbacks, and understanding the intricacies of each can guide investors toward a decision that aligns with their financial goals, lifestyle preferences, and market conditions.

When I am talking about condos, this includes townhomes as they fall into the condo category. For this discussion, I am only breaking it down into the two formats of house or condo.

Here we will explore the key considerations between condos and houses for investment:

Financial Considerations

As a real estate investor, one of the most important considerations is financial. After all, an investor is acquiring the real estate to earn a return on your investment dollars whether it is in the form of income, increase in value that can be accessed, or both.


As an investor, knowing what you are willing to invest is critical to determining what investment options are available to you. Having a plan for your overall portfolio approach is paramount. Some things to consider that will help with your budget and target the type of your property investment are:

  • knowing what is your desired outcome
  • knowing your investing desired outcome timeline
  • Knowing how involved you are with the day to day operations of the investment

Condos often have a lower upfront cost compared to houses, making them more accessible for first-time buyers or those with a limited budget. Smaller down payments and lower initial purchase prices can facilitate easier entry into the real estate market for aspiring investors.

Houses, especially detached ones, generally have a significantly higher initial purchase price, making entry more difficult for those with limited financial resources for the down payment and even more importantly,  qualifying for a larger mortgage amount due to the higher price.  Also, higher mortgage interest rates can greatly affect an investor’s ability to financially carry the mortgage as well the higher initial entry cost.

Appreciation Potential

Houses, especially in desirable neighborhoods, may appreciate more over time compared to condos, thus providing a greater return on investment in the long run, but it generally requires a significantly larger upfront cost to acquire. One of the main reasons for the greater appreciation potential is the fact that the land is the part that carries the highest percentage of appreciation. Yes, the house itself may appreciate due to style, size, level of upgrades etc., but in general the dwelling is depreciating.

Condos might experience slower appreciation than houses for the reasons above, but this can vary based on location, upkeep and updates, market trends, size, and age, to name a few factors. Understanding why condos can actually appreciate quite well or potentially depreciate even without the main component of land is important when making a choice between investing in the various housing types and what actual condo to target.

Rental Considerations

Condos can be easier to rent out due to their lower price point, attracting a broader range of tenants, including young professionals, students, people down-sizing, new international immigrants and inter-provincial migrants. Understanding that purchase price of a property and the rental rates are not directly connected because there are impacted by different forces. Rent is based upon rental demand and supply in the market at a given moment in time and not the price/value of the property.

This leads me to point out the rent to purchase price ratio.

Monthly rental / purchase price = Rent to Purchase price ratio

$2,000 / $200,000 = 1%

The above example is a representation of the 1% rule which states that if you can achieve 1% of the purchase price as a monthly rental income then more than likely the property will cash flow positive. In these times, this is simply a target than can’t always be achieved. However, I have noticed in many cases, if one can get at or above .75% there is a good probability that the property will provide neutral or positive cash flow.

In my experience, condos typically demonstrate a strong rent to purchase price ratio. The key is acquiring the condos in the locations that best achieve the highest purchase price ratio. One side note is that just because it is inexpensive it doesn’t always mean it is a good deal. I say this because there are inexpensive condos for a good reason which can include property, neighbourhood, and tenant issues.

Houses, particularly in family-oriented neighborhoods, may attract long-term tenants and potentially yield higher rental income than in condos. In addition to the higher rent, this tenant stability (lower tenant turnover) can also improve your return on investment as long as the property is being well maintained and the rent is maintaining pace with the increases in operating expenses.  Houses don’t always have to achieve as high a rent to purchase price ratio as condos, because there are no common area expenses for a house as for condos, thus the operating expenses can be lower in relation to the rent.

Investing in houses is becoming even more interesting for many with the growing trend of creating multiple suites within a single house and or adding extra dwellings like laneway suites.

Even though the entry level is higher in houses, the net rent achieved can be significantly higher and thus improving the return on investment for those investing in houses.

Maintenance and Upkeep

No matter what types of investment properties are involved there are always ongoing maintenance costs involved. Having a regular maintenance program is a prudent business practice as an investor because it is generally less expensive than emergency repairs due to deferred maintenance.

Condos typically have lower maintenance responsibilities, as exterior maintenance and common areas are often managed by a property management company working under the guidance of the strata council or condo board (elected representative owners).

However, you will have to pay monthly maintenance in the form of strata or condo fees. These maintenance expenses are shared amongst all the owners in their proportionate share. The tenants generally are not responsible or involved in the maintenance within the condo.

Houses may require more direct involvement in the maintenance, as you are responsible for the entire property. This includes but not limited to landscaping, repairs, insurance, waste removal, property management (where applicable) and any necessary renovations.

These costs may be lower compared to a condo complex but they are not shared with others.

In the end, the house investor may have lower month to month operating expenses but the big items like painting, roof replacement, furnace/heating replacement can carry a significant cost and affect an investor’s bottom line. Sometimes, there are agreements made as to the division of the maintenance of the property between the owner and the tenant which can impact the overall costs of properly maintaining the property.

For example, the tenant maintains the smaller more frequent things like lawn maintenance.

Geographic Diversification

It is important to consider geographic diversification when considering real estate investment, because it can have a significant impact on an investor’s overall budget and return, and financial consideration.

Geographic diversification, when researched and executed properly, can increase returns and reduce risk for real estate investors.

There are some opinions that an investor should focus all the attention in one market, and conversely other opinions for geographically diversifying.  Both are correct because this decision is very dependent on the investor’s overall capabilities, expectations, and plan.

Because of the lower condo purchase price compared to houses, an investor can often purchase solid condo investments in multiple markets for the same price as purchasing a single house.

In this scenario, there are multiple sources of rental income and often these combined rents are actually higher than would be in a single house that would cost the same as the combined purchase price of the condos.

The key thing here, is that those condos are in different markets and not susceptible to market constraints of a single market, and as such potentially lowering the investors risk by being geographically diverse.

Unless the investor has an unlimited budget, houses, by the nature of the higher prices, will be more difficult to create a diversified portfolio. However, if implemented through strong strategies, working with partners, and wise acquisition timing practices, it can be very lucrative.

Resale Value

Resale values are so dependent on a variety of market aspects, but are most affected by supply and demand.

Recently, affordability has become quite an important and tempering factor in this mix. Lack of supply and high demand, as we have seen, has had a dramatic effect on housing values. Once the price of the house gets out of reach for the average person, renters often look for a lower priced alternative, or they buy in another market where there is more affordable opportunities.

In a balanced market, reselling a house might take longer, as there’s a smaller pool of potential buyers with the financial means and desire for a full-sized home, but as noted above when housing becomes more unaffordable due to demand, sales tend to slow down.

Condos can be more appealing to a broader range of buyers, such as first-time buyers, those that can no longer afford or don’t want a house, and those looking for a lower-maintenance lifestyle.

Ownership & Renter Experience

Ownership and the renter’s experience is another important consideration. There is always a financial aspect to creating the renter experience, which has been addressed above.


Condos often come with shared amenities such as gyms, pools, and common spaces. These can enhance your tenant’s lifestyle, but will come with additional fees that are generally incorporated in the monthly condo or strata fees. These amenities in the right location, can be a significant attractant for tenants that are willing to pay a higher rent.

Houses offer greater privacy and more extensive living spaces, both indoors and outdoors, providing a more personalized and customizable living experience. Many tenants like that freedom and privacy and are also willing to pay for it as it suits their needs.

Location and Lifestyle

Expectations for housing have become more sophisticated than decades ago. Location and lifestyle plays an ever increasing role in what renters look for in the place that they rent.


Condos are often located in urban or densely populated areas, offering proximity to recreational amenities, public transportation, and all the restaurants, entertainment, and convenience of city life.

Houses may be found in a variety of locations, including more residential parts of the city, suburban or rural areas. This can provide a quieter environment with more space. Many people also feel safer in the neighbourhoods away from the hustle and bustle for the more densely populated areas that are full of apartments and condos.

There is still a need for convenience to amenities and transportation, but sometimes the renter is willing to trade some things for more space and privacy.


Condo living may appeal to those seeking a “lock-and-leave” lifestyle, with less worry about property maintenance when away. For a tenant that can be quite appealing as it removes that responsibility and gives them the senses of security when they are not home.

Houses, especially in family-oriented neighborhoods, can be attractive for those with children, providing access to schools and community amenities.

So, Are Condos or Houses A Better Investment?

Ultimately, the “better” investment depends on your personal preferences, financial situation, and long-term goals. It’s essential to carefully research the local real estate market, assess your needs, and consider both short-term and long-term factors before making a decision.

In navigating the choice between condos and houses, and which is “better” for your next real estate investment, it’s crucial to consider your financial situation, tenant lifestyle preferences, and long-term goals.

Condos offer affordability, convenience, and urban living, while houses provide more privacy, space, and potential for higher appreciation.

Ultimately, successful real estate investment requires a thorough understanding of your personal needs, a careful evaluation of market conditions, and strategic decision-making that aligns with your overall financial objectives.

By considering these key factors, you can make an informed choice that sets the foundation for a successful real estate investment journey.

Consulting with a real estate professional like myself with over 32 years of personal investing and successfully helping clients build quality real estate portfolios, can also provide valuable insights based on your specific circumstances. Schedule a Meeting with me here to discuss your unique situation and how I can assist.

Get in Touch

If your are interested in investing in real estate, or looking to list your current home, I can help you form the appropriate strategy and answer any questions you may have. 

Related Posts

Mexican Tax ID: Why Foreigners Need It and How to Get One

My recent trip to Mexico to check on Campomar Residencial, a preconstruction project nearing completion, included obtaining my Mexican Tax ID (RFC) in preparation for closing on the property. The RFC is essential for various financial, business, and legal activities in Mexico, and the process for foreigners involves specific steps and documentation, best navigated with local professional assistance.

Back to the Basics Real Estate Investing

Changing regulations, evolving markets, and a million different opinions on what to do with real estate. A great time to get back to the basics of real estate investing.


Moving Chairs on the Titanic Canadian Housing Crisis!

Government continues to fail to heed warning signs, preferring to make symbolic gestures on the housing crisis at best and make things more difficult at worst. Negligence, incompetence, or something else entirely, you decide.

The Pros and Cons of High Density Living

There are many pros and cons to higher density planning and living. It is less relevant to ask, “Is this a good idea?” and more relevant to ask, “How should this look and what is the plan going to be?”.

5 Life Lessons Learned In 2023

It is hard to plan for the future if you never take the time to look back and reflect on all that you’ve learned.