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.

Tagged as: Housing, Investing, Real Estate

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