Advantages And Disadvantages Of Buying A Townhome

After a tumultuous decade or two, the real estate market looks like it might be making a comeback. The increase in buying is especially true for the townhouse. Those who are in the market for a single-family home — but can’t really afford the house of their dreams just yet — are considering purchasing row houses, so they can be close to transportation and get their “buyer” foot in the door. Millennials are especially attracted to townhomes as opposed to condos, but each has their advantages and disadvantages in ownership. Love them or not, townhouses offer some great features that other single-family homes can’t.

Many people who want to own a home can’t afford to, especially in specific high-priced areas. A townhouse is the perfect solution for someone who wants a single-family home feel without the hassles and lack of privacy that you get with a condo or high-rise. The price is just about the same as a condominium, but you get a more “single- family home” feel, without the existence of  common areas that are shared by all residents.

Townhomes

Townhouses are most popular in urban areas. Having your own private entrance way is a huge selling point for those who aren’t into communal living. Although some townhouses might have shared areas like gardens or rooftops, most row houses have a more “private feel” than when you own a condo and only really “own” the space between the walls.

The definition of a townhouse can be somewhat vague. Some are attached to others while others are freestanding, but what most of them do have is an “HOA” or homeowners’ association fee that you have to pay in addition to a mortgage and other expenses. Sometimes the fees can be pretty hefty, so if you are in the market, make sure to add them into your monthly budget.

Hard to find financing

Although they are less expensive than most single-family homes, getting a mortgage for a townhouse isn’t always easy. To get a mortgage, banks require an appraisal. For a townhouse, that is sometimes easier said than done. Because the interiors can vary so dramatically, finding comparables might devalue a townhouse that is older in a community but has a renovated interior.

For that reason, some mortgage companies will use “underwriting” to determine the appraisal of your townhouse and treat it as they would, a condo. That can lead to higher mortgage rates.

Lower maintenance

When you choose to buy a new townhouse instead of a single-family home, you typically don’t have to pay for the exterior maintenance. Although that will leave you more time to do the things you want to do on the weekends, it doesn’t come without cost. The HOA fees are what those who own townhouses pay to have fewer maintenance requirements, but sometimes the cost is higher than you would ever have to spend to maintain your own single-family home.

Typically in urban areas and close to transportation

Townhomes are usually located in big cities or urban areas and near public transportation. That is an excellent option for young professionals who want to ditch the car and ride the train. But if you do own a car, you might find it difficult to park or have to pay an additional fee for a parking garage. That is just another expense that may take you over the edge. So depending on where you are in life and what your daily routine is, transportation can be a plus or a minus.

Limited to what you can do

If you are going to buy a townhouse, make sure that you like its exterior appearance. When you live in one, you won’t be able to alter the exterior space without approval, and there are very strict guidelines about what you can and cannot do to your home. If you are okay with limited allowance for exterior creativity, then it won’t be a problem. But it might be an issue if you want to put your own signature on it.

The townhouse is one of the fastest-growing segments of the housing market and with reason: it has many advantages. Before you decide to buy in, make sure that you take all things into consideration including resale ease and value, before you take the buying plunge.

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  • I had no idea that you usually didn’t have to pay for outdoor maintenance when buying a townhouse. It is important to remember that taking the time to understand all that is included when buying a townhouse can help you make use it is the best choice for your needs. Personally, I would want to consult with my real estate agent to make sure I know what maintenance I am in charge of and what I don’t have to worry about.

  • I agree that townhomes are lower maintenance. My husband and I are retired and recently moved into a townhome for that specific reason. We have a small HOA fee, but it’s absolutely worth not having to take care of a lawn or shovel snow every winter.

  • Since our lease is ending soon, my husband and I are wondering what type of property we should rent next. So thanks for letting us know that a townhome is easier to maintain since we usually won’t have to worry about the exterior. We will definitely have to rent a townhome since we won’t have to worry about maintaining the exterior of it.

  • I liked what you said about there being less maintenance for the exterior of the home. My little sister is thinking about buying a home and she’s been thinking mostly about single family homes. I think that she might want to consider townhouses, since she wouldn’t have to worry about doing any yard work, which I know would be difficult for her to do.

  • A good friend of mine has been looking into getting a condo for rent in a new town. She wants my insight into getting this type of property where it is located. I think she would love how close she is to transportation and urban areas.

  • Thanks for this informative article on purchasing townhomes. We’re really busy so I really liked your point that townhomes are lower maintenance than traditional homes because you don’t have to do the exterior maintenance, however, you may have HOA fees. This sounds like something we will have to keep in mind as we go house hunting.

  • I do like what you said about buying a new townhouse means you usually don’t have to buy or do exterior maintenance. My husband and I are moving to a new state and we will not have a lot of time to handle the house itself while getting used to everything. Thank you for the information about how an HOA will handle the lawns and outside grounds for fees that we’d need to factor into our purchase price.

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