The moment has come: you’ve saved up for your down payment, gotten your finances in order, set a budget, and are ready to buy a house. Shopping for a home is the fun part of becoming a homeowner. But before you start looking around to see what’s on the market, it’s best to determine what type of home to buy, so you’re not overwhelmed with options.

There are three primary types of homes: townhouses, condos, and detached single-family homes. In this post, we’ll focus on townhouses. This style of home offers many advantages, though there are some drawbacks to be aware of too. Whether you’re a first-time homebuyer, looking for an investment property, or interested in downsizing, here are some considerations to think about when buying a townhouse.

What Is a Townhouse?

A townhouse is a multi-floor home with its own entrance that shares one or two walls with neighboring homes. In suburbs, they are often uniform houses built in a community. Older townhomes in cities tend to be traditional rowhomes that can stretch on for blocks. When you buy a townhouse, you own both the structure and the land it sits on.

A townhouse can easily be confused with a condominium, or condo, because they share some common characteristics. Condos are either units on each floor of a high-rise building or one-story units in a smaller complex. Condos are similar to apartments, but they are owned by individuals rather than rented from a landlord. When you have a condo, you own your unit but not the land it sits on.

Pros of Buying a Townhouse

More Affordable

Buying a townhouse is usually more affordable than buying a detached single-family home. If you compare a townhome to a single-family home with similar square footage in the same area, the townhouse will typically be less expensive. This is because you’re paying for the inside of the house and not the acreage of a property with a large front and back yard. Affordability is why many first-time homebuyers opt for buying a townhouse as their starter home.

Less Maintenance

A major benefit of townhouses is that they require less maintenance. This is not only because they are smaller in size or built on smaller lots, but townhomes often have a homeowner’s association that takes care of the exterior maintenance on the property. This means you won’t be responsible for things like snow removal and landscaping, depending on what your HOA covers. While this is a big convenience for homeowners, these services come at a cost since you’ll pay an HOA fee. The lower maintenance aspect of these homes can be good for first-time homebuyers who may not know how much time they want to put into their home or others who simply want a low-maintenance housing option.

Amenities

In many townhouse communities, you’ll be able to enjoy shared amenities. This can include playgrounds, pools, tennis courts, and clubhouses, where you can entertain guests. Access to these amenities is convenient for residents, but keep in mind your HOA fee is what covers the cost of them.

Community

Because townhomes are close in proximity, this gives your neighborhood a community feel. Being surrounded by neighbors can make getting to know them easier. This is a perk if you’re the social type who enjoys interacting with others, as well as if you have kids since they’ll likely be able to find playmates close by in your neighborhood.

Good Investment

Buying a townhouse can be a good long-term investment. When you outgrow the space of your townhouse and are ready to move, you can easily turn it into a rental property. Townhouses are often easier to rent out than detached single-family homes, so you’ll be able to make a good return on your investment in a townhouse with steady rental income if you choose to do so.

If you decide to go the route of a starter home, remind yourself from time to time of your end goal. Close your eyes and envision those aspects you want in your forever home. That will help you keep things in perspective and remind you what you’re working towards.

Cons of Buying a Townhouse

HOA Fees and Restrictions

While HOAs provide many convenient services and amenities, there are some drawbacks. The first is the cost, as HOAs charge monthly fees that you’ll need to factor into your home budget. Some people also don’t like the restrictions put in place by HOAs, which might include rules about what colors of paint you can use on your home’s exterior or what types of windows you’re allowed to install.

Lack of Privacy

Having a friendly community feel to your townhouse neighborhood can be enjoyable, but it also means there’s a lack of privacy. The close proximity of townhomes can be challenging at times, as your front and back yard backs right up to your neighbors’ properties. You can expect to see your neighbors frequently when you are entering and leaving your home, and when you spend time in your backyard.

Noise

When you buy a townhouse, you’re going to have at least one other house attached to yours. This means you may hear noises between units, including loud neighbors, people blasting music or TV, or rowdy kids. You’ll also have parking spots directly in front of or behind your home, meaning you’ll likely hear the traffic of neighbors coming and leaving.

Less Space

Townhomes tend to be more compact and have less space than detached single-family homes. Oftentimes, they don’t come with garages and have small outdoor spaces. This means that your storage could be limited, and you’ll have to work with having less living space overall.

Resale Value

When you buy a home, you usually expect to be able to sell it for more when it comes time for you to move. Townhouses are known to appreciate at a slower rate than detached single-family homes. Your townhouse may not increase in value very much from the time you bought it or even at all depending on market conditions. Know that before buying a townhome, you may not get as good as return on your investment when you go to sell it than other types of housing.

Is Buying Townhouse Right for You?

After considering the benefits and drawbacks of buying a townhouse, you can decide if going with this style of home is right for you. While there are many aspects that benefit first-time homebuyers, those looking for an investment property, and individuals interested in downsizing, it’s certainly not limited to these prospective homebuyers. Ultimately, you will be able to determine what’s best for your needs and lifestyle.

Now you know what to expect when buying a townhouse and considerations you should be prepared for. If this sounds like the right option for you, or if you’re interested in exploring a different type of homeownership, take some time to speak with a loan officer on our team to discuss your personal situation and get started on finding the home of your dreams.

The included content is intended for informational purposes only and should not be relied upon as professional advice. Additional terms and conditions apply. Not all applicants will qualify. Consult with a finance professional for tax advice or a mortgage professional to address your mortgage questions or concerns. This is an advertisement. Prepared 9/23/2021.