The decision on what type of home you want to live in can be quite tricky since you can’t really predict how long you will occupy the unit and the changes along the way you may have to accommodate in the future. As you search for a home that best suits your needs, one of the unit types that you will come across is a townhouse. Here is what you need to know about this housing type in order to determine whether it may be a viable option for you.
What is a townhouse? A townhouse is a multilevel unit that is narrow in design which is attached to other similar homes on the street. These unit types are commonly found in urban areas, although they come in various sizes and designs depending on location.
In east coast cities such as San Francisco, you are likely to find a considerable number of blocks lined with townhouses. On the other hand, townhouses can also occur as standalone homes. In addition to owning a townhouse, the resident also owns the exterior of the home and the land on which the property is located. A townhouse community may be governed by a Homeowner Association (HOA) whose main role is to manage and maintain the neighbourhood. The cost of a townhouse usually depends on the location, although they are generally cheaper than detached houses. The amenities you may find in townhouses include lawns, backyards, driveways, and even a garage in some cases.
Many homeowners who intend to live near or within urban areas often choose townhomes since they are the more affordable option as compared to living in a single family home. Here are the various aspects of townhouses to take into consideration.
Table of Contents
Various aspects of townhouses
1. Structure and design
In most cases, townhouses are constructed in a row of other similar but independent houses. The general similarity in the design of townhouse exteriors and their arrangement on a street resulted in them being referred to as row houses. In terms of design, townhouses in a row typically have a similar layout, usually mimicking that of a traditional family home. Most of these units are two to three stories tall, and they are usually narrowly built so that they can fit several units within the row.
Townhouse ownership comprises of both the interior and exterior areas of the home, which includes the roof and the exterior walls. Additionally, you also own the land on which the property sits. If the property includes a garden, yard, driveway, or a garage, that is usually under your ownership as well.
Unlike in a duplex where you will find two different families occupying separate units, each townhouse in a row is typically occupied by only one family.
4. Common areas
Although townhouses have common areas, they are generally fewer than what you will find in other unit types such as condos and apartment complexes. Depending on where you live, some of the common areas you may encounter in a townhouse community include a pool or even a communal park if you are lucky. Townhouses are more likely to include private spaces such as driveways, backyards, and porches.
5. Homeowner Association (HOA)
The HOA is a body that governs how various aspects of the neighbourhood are managed. It is usually run by an executive board that is elected by members of the townhouse community. The size of an HOA varies from one neighbourhood to another, and all the townhouse owners in a community are required to be members. There are usually regular meetings held by the board that all residents are expected to attend.
- Maintenance and repair of the common areas – An HOA is usually responsible for the repair and maintenance of the common areas. The common areas in a townhouse community are partially owned by each resident. These areas include driveways and a garage if present. The costs of upkeep of these areas are usually assessed on every month so that the total cost is billed to every member of the townhouse community. As for exclusive common elements such as porches and balconies, unit owners may have to cover of maintenance and repairs of these areas.
- HOA fees – Members of an HOA are required to pay yearly, quarterly, or monthly fees. These fees are meant to cover the cost of upkeep of the community common areas such as pools, lighting, parks, or clubhouses. The fees typically vary depending on your location and the quality of the townhouses. The HOA can make the decision to raise fees based on the needs of the community in terms of maintenance. Depending on how the HOA is structured, members of a townhouse community might also be charged a special assessment. However, the cost of HOA fees for townhouse communities is generally lower when compared to condos since owners also have the responsibility of maintaining their property.
- Rules and regulations under an HOA – HOA rules are sometimes known as covenants, conditions, and restrictions (CC&Rs). These regulations are put in place for all members of the townhouse community to abide by. Before you invest in a townhouse, ensure that you request a copy of the rules and regulations to get a better idea of what you can expect if you opt to live in the property.
Just like any other real estate property, the cost of a townhouse is usually determined by the location. Other than the initial price, other factors that have an impact on the cost of a townhouse include home inspection costs and property taxes. There are also other costs that you may incur along the way such as HOA fees and cost of maintenance and repair that you should keep in mind as well if you intend to purchase a townhouse, as a renter, you will find that the cost of rent for townhouses is higher as compared to unit types like condos and apartments since they are generally larger in size.
7. Resale value
The resale value on a townhouse heavily depends on the real estate market. On one hand, paying the mandatory HOA fees is an investment that ensures the common elements and the neighbourhood as a whole are well-maintained. As a member of the townhouse community, you may be able to use this as leverage when the time comes to resell your unit and use these attractive features as selling points. On the other hand, the resale value of townhouses may not be as great especially if you live in an area where there is a high number of townhouse developments.
8. Home insurance rates
The insurance rates of townhouses are generally higher than for most unit types since you will need an insurance cover for both the interior and exterior of the unit.
Townhouses are generally spacious, with most of them being two or three stories high. They are generally favoured by residents who are in need of a large unit that can accommodate more than one person.
10. Investment value
Depending on how strict the rules and regulations put in place by an HOA are, the investment value for a townhouse may not be as impressive as you might expect. This is especially true if the HOA controls a number of areas in the community, forcing you to comply with other people’s needs. For example, if the HOA does not allow townhouse owners to rent out their units, this may affect your intention to earn an extra income.
When you live in a townhouse, you can expect to share at least one wall with your neighbours, as a result, noise may become quite an issue especially if the walls of the unit are not adequately soundproofed.
12. Renting and owning
Townhouses may either be purchased or rented out by an owner to another party.
Before you go for a townhouse, it is important to take into consideration both the advantages and disadvantages that come with this unit type.
Pros of Townhouse
1. They are spacious
Townhouses are typically big in size, so you don’t have to worry about living space. Many townhouses are just as spacious as detached units, and those with particularly well-organized floor plans can seem much bigger than they really are.
2. They are affordable
Unlike for a condo, you won’t have to make a hefty down payment upfront when you purchase a townhouse. Furthermore, they are generally more affordable to buy than detached homes, and the utilities might also be cheaper since residents share walls.
3. Usually conveniently
Many townhouses are conveniently located in towns and even within cities. In addition to making great additions to the architectural landscape, they are especially convenient for those who don’t want to move too far away from the city.
4. They usually include amenities
Townhouses are usually equipped with amenities such as swimming pools and parks, as well as services such as HVAC inspections, a trash service, and HVAC inspections.
5. The sense of community
Most townhouses are usually arranged in rows, with neighbors living adjacent to one another. Living in such close proximity brings about a sense of community, and the added benefit of having a well-run HOA brings members closer together.
6. You have full ownership of your home
Unlike for a condo, as a townhouse owner, you have more control over your space since you own the interior and the exterior of your home, as well as the land on which it is situated. Depending on where you live, this allows you more freedom when it comes to how you decorate or renovate your space.
Cons of townhouse
1. You will still have to carry out a huge portion of your own maintenance and repairs
Even with the presence of an HOA, you still have to take care of a considerable portion of maintenance and repair since the exterior of your unit is under your ownership. The HOA is only responsible for the common areas that are used by everyone in the community.
2. The HOA may be limiting
Depending on where you live, the rules and regulations that HOAs have in place may at times be restricting for some. While these stipulations may be welcome when you have noisy or irresponsible neighbours, they may be quite restrictive when you want to install solar panels, keep pets, throw a party, or paint your unit a colour that is not approved by the board. Make sure that you are comfortable with making compromises when you move into a townhouse community governed by an HOA.
3. Their design may be too similar for some
Townhouses tend to have similar designs and layouts. This may be off-putting for those who are looking for unique living spaces.
4. Sharing a wall may compromise privacy
One of the biggest issues of living in townhouses is having to share a wall with neighbours on either side. This might not be a problem, but it might turn out to be an issue if your neighbours are noisy, generally compromising your peace and quiet.
5. Home insurance is higher for townhouses
When you own a townhouse, you have to look for insurance that adequately covers the interior as well as the exterior of your townhouse.
6. Resale value may lag
Depending on the market, the resale value on townhouses may sometimes lag. This is especially common in areas where townhouse developments have been extensively set up. Developers tend to replicate successful developments, consequently resulting in unfavourable competition.
Townhouses usually suit the needs of a diverse group of people. Here is a summarized list of people who might want to purchase one:
- First-time homeowners – If you are looking into buying a home for the first time, consider going for a townhouse. They provide a great transition for those who are ready to move on from apartments but cannot afford detached homes.
- Those looking to downsize – Townhouses are a great option for those who are considering downsizing since they don’t have much use for space and are looking for a living space that is smaller and simply easier to maintain.