Homeownership doesn’t always translate into owning a detached house with a spacious backyard. Alternatives to the traditional home, such as townhouses, often come with a more affordable price tag with access to convenient amenities. You’ll have to share walls with neighbors, but living in a townhouse can foster a stronger sense of community.
[Read: What Does ‘Move-in Ready’ Really Mean for Your Home?]
Here’s what you need to know about townhouses to help you decide whether this type of home is right for you.
— What is a townhouse?
— Townhouse vs. condo vs. apartment.
— The cost of living in a townhouse.
— Townhouse pros and cons.
What Is a Townhouse?
“Townhouses, also known as townhomes, are typically multistory structures that share one or more walls with neighboring units,” explains Sheila Smith-Oliver, licensed real estate agent at Amazing Realty in Austin, Texas. “They are standalone units, often arranged in rows, and can offer a sense of privacy like detached houses.” Each townhouse will have its own entrance, but they can share features, such as a small front or backyard area, or certain amenities.
Townhouses can be rented or individually owned and are often located in communities governed by a homeowners association. “In the past, townhouses were more common in urban areas, but now they are just as common in suburbs, and their popularity is growing in rural areas as well,” says Andrew Welker, founder and CEO at Welker Properties in Dallas.
Townhouse vs. Condo vs. Apartment
“Sometimes ‘townhouse’ is used to describe the style of the structure, but the main difference between a true townhouse and a condo is in the ownership of land and the building exterior,” Welker says.
Townhouse owners share one or more common walls with adjacent homes, but they’ll own the entire structure and the land it sits on, he adds. Condo owners own the interior space, but there’s joint ownership of the building’s exterior and the land.
“Renters making the move to homeownership may find purchasing a single-family residence too expensive and overwhelming. A more affordable option may be purchasing a condo or townhome,” Smith-Oliver says. “One of the allures may include shared amenities such as playgrounds, parks, pools, fitness centers and a sense of community.”
An apartment is a rented unit that you don’t own. You’ll sign a lease stating your monthly rent and your rights and responsibilities as the tenant. You pay rent each month to a landlord until your lease expires and you decide to move out. You aren’t responsible for fixing anything that breaks, such as the refrigerator or water heater, or cleaning up your apartment complex’s common areas.
[READ: The 10 Best Apps for Finding Your Next Apartment.]
The Cost of Living in a Townhouse
“This will depend on several factors, such as the finish-out quality, but townhouses are typically more affordable than single-family homes because the size of the land being purchased is typically smaller,” Welker says. What you pay depends on your location, the size of the townhouse, HOA fees, market demand, the included amenities and your method of financing.
If you’re comparing the price to condos, Smith-Oliver claims a townhouse can be more expensive due to the ownership of the land. If you want to rent a townhouse, Smith-Oliver says rental prices can vary based on similar factors. “The most expensive penthouse in NYC known as ‘The One Above All Else’ is currently listed for $250 million. But there are of course more affordable options for under $300,000 in cities such as Austin, Salt Lake City, Cincinnati, Indianapolis and Portland,” she adds.
Townhouse Pros and Cons
Here are some of the pros and cons of living in a townhouse.
Pros of Living in a Townhouse
— Cost: A townhouse is generally less expensive than a single-family home, depending on the location. This is a great option for first-time buyers to purchase a home at a lower price and start building equity.
— Financing: Financing a townhouse follows the same process as taking out a mortgage for a single-family home. Townhomes may also qualify for government-backed home loans, including by the Federal Housing Administration, Department of Veterans Affairs and the U.S. Department of Agriculture.
— Amenities: Townhouses can come with amenities that people living within the community share. This can include a clubhouse, gym, pool and more.
— Maintenance: “Townhome owners have more responsibility for the maintenance and upkeep of their units, including both interior and exterior aspects. This includes tasks such as landscaping, roof repairs, and maintaining private outdoor spaces,” Smith-Oliver says. “However, certain aspects of maintenance, such as structural issues, may be covered by the HOA.”
[SEE: 15 Secrets to Selling Your Home Faster.]
Cons of Living in a Townhouse
— HOA: An HOA might cover some upkeep and maintenance expenses, but the also come with fees and restrictions. Fees range anywhere from $100 to thousands of dollars per month, and HOAs have the authority to enforce rules and give out punishments for violating them. “The HOA meets regularly and enforces the rules of the association and may charge citations for breaking the rules,” Smith-Oliver says. “Missed payments can result in a lien on your property or even worse, a foreclosure for nonpayment.”
— Less privacy: Because townhomes share walls with other residences, there’s less privacy than if you were in a single-family home. There’s also a greater chance that you’ll be able to hear your neighbors through the walls.
— Multiple levels: All townhouses have more than one level, which can become a problem for older homeowners or those with mobility issues.
— Smaller space: While townhouses have multiple floors and are often bigger than apartments, they’re often still smaller than standalone houses.
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What Is a Townhouse? originally appeared on usnews.com
