Many people choose to buy townhouses. Besides detached single-family homes, townhouses are one of the most common types of properties families choose to buy or live in. If you are thinking about purchasing a townhouse, there are many factors you should consider before committing to your purchase. Buying a townhouse is very similar to purchasing any sort of property, but there are some differences to be on the lookout for before committing to your purchase. This article will discuss tips to keep in mind if you are thinking of purchasing a townhouse in the new year.
What is a Townhouse?
You might be asking yourself, what is a townhouse? What makes it different from a detached single-family home? Well, traditional townhomes are sort of the in-between of a detached family home and a condominium. Typically, it is a multiple-story home that is large enough for a single-family. These townhomes share exterior walls with the units next to them and runs usually the length of the street. Every townhome on the street may be somewhat different, but they are most likely pretty similar in their interior. Some exterior differences are usually cosmetic, such as the paint color of the townhouse or the style of the yard. Townhouses are also most commonly found in the suburbs or in urban areas, where they can be built up to the zero lot line.
Townhomes are commonly mistaken as being condominium units when they are in fact separate styles of properties. Townhomes are not considered condos because they don’t have units above them or below them. They are just single-family homes with separate heating and cooling systems.
Although townhomes and condominiums may have a lot of similarities, a difference is you own both the interior space and the exterior space in a townhouse. If you live in a condo, you typically share the outdoor spaces such as yards and patios with other residents of the condominium unit while in a townhouse that space directly belongs to you. Even though you own the exterior land around your townhouse, you most likely are still responsible for paying HOA fees for trash pick up or any upkeep of shared spaces such as parking lots or garages.
There can be a lot of benefits of owning a townhouse such as independence, privacy, and your assets increasing in reseal value. It is a very affordable option for a single-family home. Some townhouses are operated like condo units though, where monthly payments are how landlords collect rent and annual fees are collected.
What are Some Townhouse Pros and Cons?
Just as if you are buying any kind of property, there are pros and cons that should be considered before buying a townhouse. Here are some pros of buying a townhouse:
- Townhomes are affordable: Although they are fairly similar to single-family homes, townhouses tend to be much more affordable compared to detached single-family homes. Townhouses can even be less expensive than detached homes in the same location. This is because it is cheaper to build attached homes and therefore less expensive for consumers to purchase. These homes are a great option for families looking for a less expensive house.
- They have less maintenance than detached homes: As townhomes usually have less exterior space, such as a yard or patio, it is much easier to keep up with the maintenance. Additionally, there are some areas that you may not be responsible for its upkeep as well. Some of these spaces could be shared spaces like parking lots or any shared yard space. In this case, you typically would pay an HOA fee and have a worker come to maintain this area for you.
- Townhomes offer more ownership: When you buy a townhouse, you typically have ownership over the interior and exterior of your property. This means there is more freedom for designing the exterior of your home such as the color of paint on your house or how you decorate your yard.
Now that you have some pros to consider, here are some cons of buying a townhouse:
- They are less private than a detached home: Although this may not bother everyone, townhomes share some interior walls with the townhouse next to yours. This means it is likely you will have a family living on either side of you. Even though your townhouse could be well insulated, there still can be some occasions in which you hear your neighbors and they can hear you. You should be aware that a townhouse may be noisier than a detached family home.
- Townhomes could be more expensive per square foot: Even though overall townhouses may be a less expensive option than purchasing a home, they sometimes can actually be more expensive per square foot than any other property.
- HOA fees: Similar to condominiums, most townhomes ask you to pay monthly fees to the Home Owners Association (HOA) to help with the upkeep of common areas or exterior spaces. This can include parking lots, sidewalk care, trash delivery services, and lawn care. While this is also a benefit because it makes townhomes low maintenance properties, it comes with an additional cost some might not like. These HOA fees and regulations also may impact how much control you have over changing the exterior of your home. This may limit any aesthetic changes you may want to make.
Can you Buy a Townhouse?
In short, yes you can buy a townhouse. Many families choose to buy townhouses as a more affordable option for living. Townhomes are cost-friendly options as single-family homes. They are more private than a condo, as you only have the walls on the sides of your home shared between other units rather than all 4 walls, and having people above and below you. They also come with more private yard space and patio area that most condominium units would not have.
Buying a townhouse is also a common real estate investment. Many real estate investors choose to purchase a whole street of townhouses and rent them to individuals or families as a way of generating a rental income. They are quite easy to maintain, so you won’t have to invest too much money into maintenance.
If you are a real estate investor interested in buying townhomes, check out Mashvisors Investment Property Calculator to help determine the cash flow and profits that income properties can generate. This calculator uses the most up-to-date data and trends for its analysis and allows you to input data to generate an extremely accurate estimate.
How to Buy a Townhouse
If you are interested in buying a townhouse, below are some townhouse buying tips to help you find the right townhome to fit your needs.
Working With a Real Estate Agent
When you are thinking about purchasing any type of home, you should always consider working with a real estate agent. They can help guide you through buying a townhome. They can also help get the best price for a townhome in a certain area. They are able to negotiate with the other agent and get you the best price. Additionally, a real estate agent will help keep track of all the paperwork that is involved with buying a townhouse. It is also important to remember that real estate agents take a commission. They will be upfront about what they charge for a commission before you agree to work with them. Although you may be paying them for some additional help, they can be very beneficial in the end when you are thinking about buying a townhouse.
Knowing the Neighborhood you Want to Live in
Before you start your search for a townhouse to buy, you should take a look at potential neighborhoods. It is important to find a neighborhood that fits your specific needs, such as if you have children and are looking for schools or parks in the area. You also should get to know the other residents in potential townhomes. Although you will have your own space, these townhouses do share walls with the units next to them. This means sometimes you might be able to hear your neighbors and they might be able to hear you. You want to get to know the neighbors to make sure they will be respectful of these shared walls. If you have children, you may not want loud neighbors who keep your kids up at night. Always check out the neighborhood before purchasing a townhouse.
Some townhomes come with HOA fees, which means extra monthly payments. Make sure to review what these HOA fees cover or if your townhome will have these monthly fees before buying a townhouse. These fees should be considered when determining the overall purchase price. Additionally, these fees sometimes also have regulations as to what you can change about the exterior of your townhome. Make sure to thoroughly review these regulations so you don’t break any rules you were not aware of.
Prepare for a Potential Bidding War, or Having to Look at Many Townhomes
Townhouses are very common property for first-time homeowners, especially for single-family homes. In some areas, they may be more desired than others and therefore more difficult to be able to purchase. If you are looking at a townhouse in a popular area, you might find yourself in a bidding war against another potential buyer. If this happens, it is important to discuss with your real estate agent what to do and to determine how much you are willing to bid on a property. It is also possible you lose a bidding war and will have to view other townhomes. Keep in mind through the townhouse buying process that you might have to view many potential homes.
Get Preapproved for Financing and a Mortgage
Mortgages can be very expensive. You should make sure you shop around a bit before committing to a lender. Your real estate agent may also be able to recommend some lenders to you as well. Additionally, you should get preapproved for any financing before beginning your search for any property. It gives you the best overall idea of what you can afford, and your real estate agent can look specifically at your price range for you. Getting preapproved for financing also helps determine if you will be able to afford the HOA fees on the townhome you are interested in.
Having a Home Inspection Before Buying a Townhouse
Even if your townhouse is overlooked by the HOA, scheduling a home inspection before purchasing one may be a good idea. This would let an outside perspective look over the property to ensure there are no health or safety problems gone unseen. Additionally, scheduling a home inspection will ensure you are not overpaying for the property.
Making Sure the Townhouse Has All the Amenities you are Looking For
Before purchasing any property, you must make sure the townhouse has all the qualities you are looking for. This may include the size of yard space or patio you want, or parking spaces available. Additionally, some townhouses have shared spaces you may get access to such as a gym or pool.
Is Buying a Townhouse Worth It?
Overall, buying a townhouse is worth it if it fits your and your family’s specific needs. Just like any property, there are pros and cons that you should consider before purchasing a property. Townhomes are great options for people who want a low-maintenance property. As you typically pay HOA fees, they are in charge of maintaining the exterior of your home, including the yard and sidewalks. This means you really will only have to really focus on maintaining the interior of the townhouse.
If you are an investor, buying a townhouse or a street of townhomes may be a good investment. These properties are sought after and are desirable for first-time homeowners. Investing in these properties can provide a steady cash flow and provide a great return on your investment. Visit Mashvisor to start your 7-day free trial and view investment proeprties in your area.