Are Townhouses a Good Housing Option?

by Jessica Sommerfield · 7 comments

I’ve always been out of the loop on townhouses because, until now, I haven’t lived in an area where they were common. Now that I’ve moved to the greater Seattle area, I see them everywhere. To me, townhouses have always seemed like the ‘glorified apartments’ of urban areas. Along with condos, they represent limited home ownership within the realm of community living. So what exactly are the differences between apartments, condos, townhouses, and homes? Are townhouses worth your consideration?

Apartments vs. Condos/Townhouses

The cost of living rises pretty drastically from Michigan to the Seattle area. Even in the lower price range, our housing expense has more than doubled (although our previous rent was cheap even for the area). Now that we’ve settled and started looking toward the future, we’re thinking about our housing options. Down payment aside, the mortgage for a townhouse or condo might be equivalent (or cheaper), while at the same time a better investment than continuing to rent from an apartment community, long-term. Some perks would stay the same, such as:

  • Amenities — many townhouses and condos feature similar amenities to large community apartments, including gyms, pools, spas, etc. What’s better, condos and townhouses include shared ownership of these as well: they’re not just a provided service. Theoretically, you could pool resources with other owners and get more amenities everyone wants.
  • Lawn care and other maintenance — What’s included in an apartment complex’s rental rate is paid in monthly fees to a home owner’s association (HOA) among most townhouse and condo owners.

Additional Townhouse Perks:

Another great perk of townhouses and condos is the stability of the neighborhood. You can actually get to know and trust your neighbors because they’re more invested in the surroundings than renters.

Lastly, townhouse ownership might allow you the chance to purchase two adjoining units and rent one out. You’d get to choose your neighbor and make some money in the process.

Condos vs. Townhouses

These two are often interchanged because of their similarities, but they’re not identical. Condos are built in styles similar to townhouses or apartments, but ownership is limited only to the interior space of the condo. All exterior surfaces and areas are community-owned. Townhouses, on the other hand, include ownership of the little piece of land (and small patch of grass) they sit on.

Townhouses vs. Houses

By far the biggest difference between townhouses and even small houses is their price. Townhouses are generally cheaper than single family homes. In my area, the price of a townhouse is roughly half the price of the cheapest house. So, for the perks of ownership at way less of an investment, it could be a good option. Here are a few differences.

Maintenance — Homeownership usually includes full responsibility for all interior and exterior maintenance, whereas townhomes pay their HOA to do it. Allegedly, there are extremely unreasonable and expensive HOAs out there, but there are also good ones. When considering a particular townhouse, you should always factor in monthly fees and check into the HOA’s reputation with its participants. In some cases, you could be paying the equivalent of a single-family home mortgage with less freedom to do what you want with your property.

Renovations — If you enjoy having nice, new things, a townhouse might be a better option for you. They’re often newer than single family homes on the market, with coveted built-in upgrades like granite counters and hardwood floors, for much less than equivalent features in a full-sized home.

Space and Privacy — Generally, you’ll sacrifice both of these since many townhouses share two walls with adjoining homes, with or without firewalls between. Then again, houses in some suburbs are so close they might as well be touching. Of course, having a shared wall means you’ll hear your neighbors if they happen to be loud, whereas you’ll only hear what’s going on in another house if both you and them open their windows.

The Takeaway

In our situation, a townhouse might be a more affordable option than a full-sized home: on par with renting plus the additional perks of ownership. This might not be the case for you. In areas where homes are cheap, more space and freedom from an HOA might be worth a bigger investment.

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{ read the comments below or add one }

  • ljam45 says:

    I prefer a single family dwelling on its own 10,000 plus sq.ft lot. I don’t want to share a building with smokers, and noisy or disruptive people. The extra expense is well worth the peace of mind.

  • Ryan G says:

    I owned a townhome and loved it. Very small “yard” that I landscaped with plants and grass = very little yard maintenance. After my girlfriend (now wife) moved in with her dogs, we realized that having a real yard is a benefit to people in certain situations (dog owners and parents). We sold my beloved townhome and will be looking for something more standard.

    My townhome had no HOA, which I considered a good thing when I bought it as it gave me the freedom to do what I wanted to the yard. However, it also gave my neighbors the freedom to never take care of their yards. The result was that I had to pay a service to come in and take care of their yards while I was trying to sell my house.

    I am still anti HOA… HOAs are managed by someone and are rarely ever non-profit. Those management companies are performing a service, but they are taking a cut… sometimes a very large cut. Plus, you have very little control over how the money is spent, who is hired, or how much rates go up. It is certainly not something I would want to commit to be a part of for the foreseeable future.

  • Deandrea Taylor says:

    I don’t mind cuting grass just give me my own yard keeping yard togettet is no problem to me

  • Minnlady says:

    I’ve owned both. Because of the market timing and my retirement planning, there is more potential return on my investment in my single dwelling house. The market for selling town homes in my area is sketchy because they’ve been overbuilt. So there is a glut of them on the market. I can either rent my house out later, or sell it when I retire in a few years. So a few factors to also consider is the market and how long you plan to hold onto the property

  • HTL says:

    Comparing to a single family house, with a condo or townhouse, you usually need to pay HOA, which is similar to property tax of the single family house.
    Besides the differences mentioned above in the article, I think one more consideration is that property tax is deductible whereas HOA is not, from what I know. Besides, doing some external house work such as cutting the grass, sweeping the leaves, or shoveling snow can be an enjoyable exercise, depending on your personality. Just my 2 cents.

  • Lisa says:

    I’ve rented apartments, owned a house, and now own a condo. Unless you really value having a yard, a condo is definitely the way to go for home ownership. The condo fees are well worth it for exterior maintenance, lawn maintenance and snow removal. I’d definitely be putting at least that much money per month, plus MY OWN TIME into yard and exterior maintenance with a house (because I’ve done it before). Houses are more expensive where I live, so that also makes the price per sq. ft. much nicer for condos. Maybe there are some people who spend as much time enjoying their yards as they do maintaining them, but it seems like a lot of expense for not much return. We have nice parks and trails in our area, so that also contributes to the decision that a yard is overkill.

  • Steven says:

    Not ever having to do any yard work is pretty much reason enough for me to go with an apartment every time! Actually, it’s not the yard work I mind so much – in fact mowing the lawn can be rather enjoyable, and even raking the leaves isn’t so bad. But then winter comes in and you get that first big snow… and that’s when you really remember how nice apartment life was 😉

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