What is a Townhouse?

A townhouse is a wonderful living arrangement for those looking for a little more space than a condo but not as much as a single-family home.  Townhouses have been a popular housing option for many and continue to remain at the top of multiple home buyers shopping lists. But let’s look in more detail at what is a townhouse and why these type of homes remain an attractive option for many home buyers.

Why is it called a Townhouse?

According to an explanation from Realtor.com the origin of the word townhouse goes back to early England, where the term referred to a home the family (usually Royalty) kept “in town” when their primary residence was in the country.  The word stuck, and today it is used to describe a type of home construction rather than just an additional home for the rich.

Most of us today know a townhouse as a type of multi-floor home that normally shares one or more walls with adjacent properties, but have their own entrances.  Modern day townhouses may even have a basement, a small garage, and even a small front and/or backyard.

Townhouse communities are often uniformly built homes that have a unique color or design theme from unit to unit, but all tie in to a common community design.  There is normally an HOA that manages the common areas and amenities that may be on-site, but the homeowner is responsible for any upkeep pertaining to their unit.

Townhouse construction has been trending upward over the most recent period where construction statistics are available according to the National Association of Homebuilders.  This housing option has been a popular choice in the past for many homebuyers and the statistics suggest that construction of these units continues at a strong pace.

What’s the Difference Between a Condo vs Townhouse?

Condos and townhouses have many similarities to each other because they are both communities of homes where the units are attached by one or more walls, and many communities have very nice amenities for residents, with the units mostly individually owned.

But there are differences in a condo vs townhouse, lets look at some of the major differences that prospective home buyers should look for.

Condos

Ownership:  condo owners typically only own the interior of their condo unit and are not responsible for the exterior common areas

HOA fees:  these fees are higher for condo owners because they are paying for the common area maintenance and upkeep, such as lawn care, pool maintenance (if applicable), trash removal, and pest control

Home Insurance rates:  the insurance rates for condos are normally lower because they only need to insure the interior of the unit

Size: condos come in a wide variety of shapes and sizes.  But in many cases, condos are normally smaller than townhouses and are great for first time home buyers or for those that like urban living in an easy to maintain, smaller setting

Townhouse

Ownership:  townhouse owners typically own the interior and exterior of their unit and are thus responsible for both areas.  This exterior area might include the lawn, the driveway, and in some communities it may include the roof.

HOA fees:  these fees for townhouse owners are much lower than for condo owners.  Townhouse owners are responsible for more of their units maintenance and upkeep so their HOA fees are lower

Home Insurance rates:  the insurance rates for townhouses are normally higher because owners must insure both the interior and exterior of their units

Size:  townhouses can be quite large in size and are typically multi-story units.  This housing option is an ideal choice for a couple or young family that doesn’t want the responsibility of large exterior maintenance

What are the Pros and Cons of Buying a Townhouse?

There are pros and cons with any housing purchase, and buying a townhouse has it’s own set of pros and cons for the home buyer to consider.

Pros

Depending on the development where you buy, buying a townhouse could give you close to the same space you might have in some single-family homes, but without all of the maintenance that comes with owning a single family home.

The outdoor space with a townhouse is smaller than what might come with a single-family home so much easier to maintain.  And any community amenities like a pool, clubhouse, or a tennis court will be maintained by the HOA and not the homeowner.  This is a plus for the homeowner when picking the right townhouse community.

Cons

The major con might be that you will have at least one attached wall with your neighbor, and maybe two.  If you are used to having your space in a single-family home this could take some getting used to.

And if your previous home was a single story, get used to multi-floor living that comes with owning a townhouse. This might be a challenge for some older homeowners but keep this in mind when shopping for a townhouse.

Who is a Good Candidate to Buy a Townhouse?

A townhouse is a good option for any prospective home buyer, but certain types of buyers may enjoy townhome ownership more than others.  Here are some thoughts on why buying a townhouse may be a good option for the following types of buyers.

First time Home Buyer:  with more of us choosing to work from home as our main employment option, people want more space at home now than we did in the past.  A nice townhome might be a great option for a first-time home buyer to try out home ownership in a spacious unit that might be larger than a condo, but without the responsibility that comes with maintaining a single family home.

People looking to downsize:  if the kids have moved out and it is only the two of you, a townhouse might be an excellent step down from a single-family home.  You still have a small yard and a spacious home, but you don’t have anyone living above or below you and you can lock up the home and travel at a moments notice.

Investors:  there are many townhouse communities located in great neighborhoods with excellent schools that would make good rental properties to add to your portfolio.  You can rent to families that want a small yard with minimal exterior upkeep, and a large unit with multiple floors.  Townhomes are quite easy to maintain and make great rental properties.

People looking for a second home:  do you have that location that you love traveling to for the perfect summer weather or the great winter change of seasons?  A townhome that is large enough for guests to join you on extended stays and requires minimal maintenance when you are away may just be the perfect property for second home buyers.

Prices on homes in the Phoenix area have increased at a historic pace in the past two years.  However, in our recently published Phoenix real estate housing market forecast we present our research to show why we think housing prices will still increase in the new year, but at a much slower pace than we saw in 2021.  Now may be a good time to consider buying a home if your finances are ready for a home purchase.

If you would like to set up a FREE Mortgage consultation, or if you would like to get pre-qualified to buy a home, please feel free to reach out to me anytime either via email at steveATthehomebuyinghub.com or via phone at 480 365-8978.