What is a townhouse?
A townhouse is a type of building with two to three units that share walls. There are similarities between townhouses, condominiums, single-family residences. For example, townhouses come with limited privacy and shared walls which makes them similar to condos.
At the same time, townhouses can have a yard, private parking garages, multistory without other units on top which makes them similar to single-family homes.
Difference between a town house and a condo
| Townhouse | Condo |
| Similar to a single-family house | Similar to an apartment |
| Usually, they come with a private yard | Come with a shared yard |
| The owner can maintain the interior and exterior or just the interior and let the HOA takes care of the exterior space | The owner takes care of only the interior of the property. The exterior is covered by HOA. |
| Has fewer amenities | Come with a lot of amenities |
| Has more privacy with no other owners on top | Has less privacy and can have owners on top depending on the level |
| Fewer HOA fee | Higher HOA fee |
| Rules and terms are less strict | Rules and terms are more strict |
What are the benefits and cons of buying a townhouse?
Townhouses are great for new homeowners as they usually cost less money compared to single-family homes of the same size.
You can treat a townhouse as something between a condo and a single-family home. For example, townhouses are similar to single-family homes as they come with a yard, private garages, some privacy, etc.
At the same time, they have similar traits to condos since they have shared walls, HOA fees, HOA regulations and terms, amenities, etc.
From an investment standpoint, townhomes attract financially settled families as they have money to pay for space and privacy needed for their families. However, it is difficult to scale up a lot of units since they will most likely be owned individually. In this case, the buyer will encounter closing costs, and related fees, etc.
Furthermore, townhouses come with an HOA fee that takes away cash flows from real estate investors. This fee varies depending on the location and the amenities that come with the townhouse.
Limited privacy and space, regulations, and terms associated with townhouses are sometimes a big setback for many families.
