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What Is A Townhouse And Is Townhome Living Right For Me?

4-Minute Read
Published on March 8, 2021
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Buying a home is equal parts excitement and anxiety. Deciding the right home type can contribute to that struggle, especially if you’re a first-time home buyer. In your search, you may have come across townhouses as an option. But what is a townhouse, and how is it different from options like condominiums or a detached home? Let’s talk about that. 

Townhouse Definition

A townhouse is an individually owned, multifloor home that’s attached to one or more units. You can often spot them lining the streets in dense suburban and urban areas. Residents own and are responsible for both the interior and exterior of their townhome.

Townhouses tend to resemble traditional, detached homes but generally operate more like condominiums, or condos, in that they’re all part of a larger governing body. So, if you buy a townhouse, you’re most likely going to be a part of a homeowners association (HOA).

Townhomes emphasize vertical space as a way to be economical with square footage in populous areas, so they’re usually made up of multiple stories. Although their space economizing is similar to a zero lot line, townhouses typically have outdoor space, like a front and back yard.

What Is The Difference Between A Condo And A Townhouse?

Townhouses and condos are different from single-family housing in that they exist in buildings or developments where multiple individual households reside closely together, each in their own unit or home.

Condo Vs. Townhouse

In the case of both townhouses and condos, each unit is separately owned (as opposed to an apartment building, where one person owns many units and rents them out to occupants) and is typically occupied by the owner. However, it may be possible for individual units to be rented out by their owners, depending on HOA or condo association rules.

Condos

  • Typically, condo owners are only responsible for the inside of their units, and pay HOA fees that cover costs to maintain the outside of the building and any shared common areas.

Townhouses

  • Townhome owners are responsible for both the inside and outside of their homes, similar to detached homes. 
  • Townhouse communities typically have lower HOA fees than condos, because most of the maintenance falls to individual homeowners.
  • Townhomes often offer more customization freedom in comparison to condos, which come with renovation restrictions.

Research any HOA rules for townhouses you’re considering. Each HOA is different, and you don’t want to move into a community only to realize it’s much more restrictive than you’d like.

You should also keep in mind that although you may be able to get a lower HOA bill with a townhome, because you own more space, townhomes often cost more overall than condos.

Buying A Townhouse

Before buying a townhouse, it’s important to consider the factors at play. For example, you may not be able to afford a down payment on a townhome. If this is the case, it might be better to rent instead, as this option can be more cost-effective.

However, if you can purchase the home, consider the neighborhood it’s in. An up-and-coming community might promise more equity, which also appeals to real estate investors pursuing townhouses as an investment property, although it requires the right lender. If that’s the route you’re interested in, keep in mind the necessary prep work. You’ll have to establish a budget and evaluate the rental returns, among other measures. 

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Pros And Cons Of Townhome Living

Here are a few more benefits and drawbacks to living in or owning a townhouse to consider:

Pros

  • You can often find a townhouse with monthly costs similar to renting, with the added benefit of being able to build equity on a home you own.
  • Since townhouses are usually smaller than detached homes, maintenance tends to be less costly or labor-intensive.
  • If you can’t afford a detached house just yet, a townhome is a more affordable way for first-time home buyers to get acquainted with homeownership.
  • In contrast to a condo, owning a townhouse usually means having your own yard, which can be a great benefit if you have pets, or if you just want a place to care for your own garden.
  • You typically get more freedom to make decisions about both the inside and outside of your home with a townhouse than with a condo.
  • You may have access to amenities, such as a community pool.

Cons

  • If you don’t want to be governed by HOA rules, you’ll probably be limited in your search to detached homes (though HOAs can be common in detached-home neighborhoods as well, depending on your area).
  • Since you share a wall, there’s less privacy with a townhome than a detached home, similar to a duplex.
  • Compared to condos or rented apartments, townhomes come with more responsibility in terms of repairs and maintenance.

A lot of the pros and cons of purchasing a townhome will depend on the community you live in, as community amenities, HOA rules, costs and required maintenance can vary a lot. Be sure to shop around and compare communities to find one that fits your wants and needs.

Is A Townhouse Right For Me?

Townhouses can make sense for all different types of homeowners, including:

  • First-time home buyers
  • Empty nesters looking to downsize
  • Buyers looking to be close to urban centers while still having a good amount of space
  • Buyers who want more say in the interior and exterior of their home
  • Investors

Really, whether a townhouse is right for you depends on your needs and what you want out of homeownership. While some hopeful homeowners might like the idea of living in a smaller space that offers the freedom of owning a detached home with the amenities of living in a condo, others might have a strong preference for a detached home or condo, and not be interested in a home that’s more of a middle ground between those two property types.

Ready to begin the home buying process? Get approved with Rocket Mortgage® today!

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Call our Home Loans Experts at (800) 251-9080 to begin your mortgage application, or apply online to review your loan options.

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