Should You Buy a Townhouse? Pros and Cons of Owning a Townhouse
When beginning your search for a new home, there are many questions you need to answer. Where do you want to live? How many bedrooms do you need? What are your must-haves? But you also need to consider the type of house you want to live in.
You might imagine that a townhouse is similar to a single-family home, but there are some important differences. If you have never considered owning a townhouse, you might find it is exactly what you need.
We look at the things you need to think about if buying a townhouse is an option for you:
What Are Townhomes?
Sometimes known as a townhome, the idea of a townhouse can be confusing if you’re not familiar with this type of property.
A townhouse is distinct from a single-family home, as it shares a wall with either one or two neighboring properties. When compared to a single-family home, a townhouse is likely to be on a smaller lot with accommodation over multiple floors.
The home will have a private entrance, likely some yard space, and possibly a basement and garage. While this might sound like a row house, there are some differences.
Row houses usually offer similar layouts and designs to each other, and run the length of the block. Townhouses typically offer different options and choices from other homes in the development.
Townhomes share some things in common with condominiums. But while a condo might share walls on either side, as well as above and below, a townhouse will only have neighbors on either side.
Choosing a Townhouse: The Pros and Cons
To help you better understand if a townhouse is right for you, we look at the advantages and the potential disadvantages.
The Pros of Owning a Townhouse
There are many reasons why this type of home might better suit you. Let’s look at the advantages of this type of house:
Townhouses are more cost-effective
Thanks to their more efficient design, townhouses can be built on smaller lots. Since they also share one or more walls with neighboring homes, this further reduces costs. This can mean that they offer better value for money over a similar-sized single-family home.
In areas with higher home prices, townhouses can make a lot more sense. They are likely to be cheaper because they take up less space, using less land.
Less maintenance to worry about
Buying a home on a smaller lot and with shared walls means fewer maintenance responsibilities. There would likely be less yard work required compared to a single-family home, as well as less exterior maintenance.
If the townhouse is within an HOA, you might even have fewer responsibilities. The HOA might take care of some outside maintenance, perhaps leaving you to just deal with the interior of your home.
Access to facilities
If the townhouse is in an HOA, you might benefit from more amenities than you might expect. There might be a gym, swimming pool, tennis courts, snow removal, and other community facilities & services available in the development.
While single-family homes can be part of a community that offers these types of facilities, it’s more common with townhouses. If you think you would benefit from these types of amenities, and you don’t mind sharing them with your neighbors, this can be a valuable asset.
Being part of a community
This type of home means you are physically closer to your neighbors. It can also mean you are socializing more with them, too. This will more likely be true if there are shared community facilities.
Ownership
Condo owners only actually own what is within the walls of their unit. Whereas with a townhouse, you would also own the land underneath it.
Owning the lot the house sits on gives you more control and lets you do things you wouldn’t be able to with a condo. While a townhouse can provide outdoor space, you are likely to be restricted in what you can do with that space by the HOA. However, since your neighbors will also be required to follow the same rules, it can prevent many potential problems as well.
More secure
When you live closer to your neighbors and are part of a community, your home will be more secure. Neighbors are likely to notice when something unusual happens if you are away from home. With a single-family house, it is easier for a burglar to gain entry, unseen, to your property.
If you are going to be away from home for weeks or months, the HOA might be taking care of the exterior anyway. Leaving you fewer things to worry about when you’re elsewhere.
Lower taxes
Since townhouses generally occupy smaller lots, property taxes are typically lower than for a similar-sized single-family house.
Fewer responsibilities
If the property is part of an HOA, you will have fewer things to worry about in your already busy life. HOAs will often take care of the space at the front of the townhouse, leaving you with fewer chores.
If you’re someone who doesn’t enjoy yard work, townhouses make a great choice. You can also avoid many maintenance chores that you would need to tackle in a traditional home. If you’ve previously lived in a condo or rented an apartment, the transition won’t be as steep as moving to a single-family house could be.
The Cons of Townhouse Living
Even though it’s easy to focus on the many benefits offered by townhouses, you need to consider the negatives as well:
Less privacy
Since you will be living physically closer to your neighbors, you will inevitably have less privacy. You can expect to see more of your neighbors and hear more of them, too.
If you’ve previously lived in a condo, it will feel like you’ve got more privacy. But this is something you will have to get used to if you’re moving from a detached home.
Annoying neighbors, but not as bad as condos or apartments
If you are unfortunate enough to live next to someone who doesn’t have consideration for their neighbors, you will not have a pleasant time in your home. This is more likely to be a problem when you are sharing a wall with them.
While this isn’t going to be as bad as living in a condo or an apartment, it is more of a risk than single-family house living.
The homeowners’ association is likely to have procedures to deal with these occurrences. But even then, dealing with this type of thing isn’t easy.
Problem Homeowners Association (HOA)
While the homeowners’ association can make living in your home easier, it isn’t necessarily without its problems. If you buy a home within a community with an overbearing association, you could come to regret your decision.
Before you agree to purchase a townhouse or any other home within an HOA, you should make sure you understand what restrictions are placed on homeowners. It’s also a good idea to talk to residents in the community to find out if the HOA is a problem for them.
HOA fees
When a home is part of an association community, you’ll need to pay monthly fees. The more maintenance that is required, the higher your fees are likely to be.
If the community benefits from a range of facilities, this will be reflected in the monthly fees. If there are many open spaces and the HOA maintains exteriors, fees will be higher.
Covering unexpected expenses
If the community offers more amenities, there is a risk of a special assessment. A special assessment covers the cost of repairs to a communal facility if the HOA doesn’t have enough reserve funds. Without enough reserves, the HOA will ask homeowners to make up the difference.
You can uncover how financially healthy the homeowners’ association is before you decide to buy the townhouse. If the community offers fewer facilities, this is less likely to be an issue.
Multiple floors
To increase the available space in a townhouse, they are constructed over multiple floors. While this gives the home more accommodation on a smaller lot, it does also mean more stairs.
Though you might not have any issues with taking the stairs right now, that might not always be the case. It might also mean it’s more difficult to have a senior stay with you. While you can make changes to the home if you need to, it won’t be cheap to make the townhouse more accessible.
If the townhouse is built on three or four floors, going up and down the stairs multiple times every day can get old quickly, even if you are fit and well. This can make everyday chores like laundry and cleaning the home more difficult.
More limited space
Generally, townhouses are likely to be smaller as they are constructed on a more restricted lot. This will mean less space both inside and outside the home.
If the townhouse benefits from a basement or garage, lack of space might not be such an issue. However, not all townhomes offer these additional spaces. If you are moving from a single-family home where you are used to more living space, this could require some compromises.
The home is also less likely to have much yard space. This means less space for activities and entertaining. If there is a communal park and other facilities, this is less of a problem, though something you still need to consider.
Is Living in a Townhouse a Good Long-Term Purchase?
It is sometimes the case that townhouses don’t appreciate or depreciate as quickly as single-family homes. This is better if the housing market takes a turn for the worse, but less good in a buoyant market when prices are rising.
All of this will depend on the local housing market, however. In some areas, there is strong demand for this type of housing, leading to stronger appreciation.
If you want to rent out your townhouse, this might not be possible depending on the HOA. The homeowners’ association might have rules in place to limit the number of homes that are rentals.
The type of house might be a slight consideration if you are thinking about your home as an investment. But overall, the local market conditions are likely more of a factor affecting its value.
Things to Think About Before Choosing Townhouse Communities
As with any home, the location is very important. When you’re buying a townhouse, it might be easier to find a home in a better location. This can mean easier access to the places you need to visit regularly.
The size and layout of the townhouse are something that you need to look at carefully. With accommodation over multiple floors, you need to be sure there is enough space and the layout makes sense for your lifestyle.
Find out about the homeowners’ association before making an offer. Check the rules that you will need to follow and the fees. Will you be able to do the things you want in and outside your home, or are there restrictions?
You should also consider things you might want to do in the future. Perhaps you’re planning on getting a dog, but are there any restrictions on pet ownership?
Does the community offer the amenities you want? Will you make enough use of these amenities for it to be worthwhile? If there is a community swimming pool, but you only use it very occasionally, it might not be worth the additional cost in HOA fees.
Summing Up: Is A Townhouse Right For You?
There are many reasons to consider owning a townhouse. These types of homes can be less expensive, have fewer maintenance requirements, and be in better locations. But they are not for everyone.
If you want more space, fewer stairs, or avoid homeowners’ associations, a townhouse might not be for you. Even then, the advantages of this type of living might outweigh the downsides.
Townhome Frequently Asked Questions (FAQs)
- What are HOA fees, and what do they cover?
If the townhouse is part of an HOA, you will have to pay HOA fees. These fees cover maintenance for the amenities and communal spaces available in the development. It also covers insurance for these shared areas and can contribute to a reserve fund for major repairs.
- What should I look for in the HOA rules?
You should look for anything that could affect the use of your home. Perhaps they have rules about maintenance and alterations that can be made. If any of these rules seem like they could become an issue, perhaps you want to look elsewhere.
- Do I own the land under a townhouse?
Yes, when you purchase a townhouse, you will usually own the land beneath it.
- How noisy are townhouses?
Townhouses share one or two walls with neighboring homes, and this likely means you will hear more from your neighbors than you would like. Older townhouses tend to have thicker walls than newer homes. But even in newer properties with thinner walls, you are only likely to hear loud noises, and not every sound your neighbor makes. If you can visit the home at different times of the day, you might have a better understanding of whether this will be a problem or not.
- What insurance do I need?
If you have a mortgage, your lender will require you to have homeowners’ insurance. If the home is within an HOA, it should have insurance to cover the communal areas. On top of this, you may want insurance to cover your belongings and protect against injury claims. Specialty townhouse insurance is available if you aren’t otherwise covered.
About the author: This article was written by Luke Skar of MadisonMortgageGuys.com. As the Social Media Strategist, his role is to provide original content for all of their social media profiles as well as generate new leads from his website.
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