17 Pros and Cons of Buying a Townhouse

The origins of the modern townhouse go back to the days of early England when the term referred to a property that someone kept “in town.” This real estate was usually reserved for nobility or royalty since their primary residence would be in the country. The word “townhome” stuck for the modern development, so now you can see them used as a wide variety of residences instead of only as a second home for the wealthy.

A townhouse in the United States is a single-family dwelling that must have at least two floors and share a wall with another house. Unlike a fourplex or duplex, each townhome is individually owned. As an owner of this property, you can then choose to become a landlord to rent it out to others.

This structure makes them similar to row houses, although their arrangement is a little different. Townhouses can be in several different configurations, while their counterparts are usually lined up in a row that can stretch for an entire block. The U.S. Census Bureau does not distinguish between the two, so all of them fit under the heading of “attached house.” About 6% of the total housing inventory in America fits this description.

If you are currently in the market for a new home, then these are the pros and cons of a townhouse that you will want to consider.

List of the Pros of a Townhouse

1. A townhouse provides an affordable housing option for families.
You will find townhouses tend to be the most popular in communities where property prices are high and there is a short supply of available land. Because this structure shares a wall with your neighbors, they make the most of the space that is available when compared to the standard detached single-family home.

Robert Palmer, host of the Saving Thousands Radio Show, says that you will typically see townhouses in specific circumstances. “There are parts of the country where you don’t see townhouses at all,” he told Realtor.com, “typically where land is opening available. Where you really see them being utilized is in areas of transition – areas where you see an urban-to-suburban transfer, before you really get into the sprawling land of the suburbs.”

2. You get to own the exterior and the interior of the building.
Townhouses are very similar to condominiums, but there is one clear difference. If you own a condo, then you will typically have ownership rights over the interior of the structure. When you purchase a townhome, then you usually own the exterior as well. There may be rules of a HOA to follow that would not be present otherwise (and the expense of supporting the association itself), but that all works together to ensure that the value of your property can stay high.

When your neighbors fail to take care of their townhouse, the presence of an HOA can enforce specific rules that could lead up to and include a foreclosure. It might be a little expensive, but it isn’t any different than owning a detached single-family home governed by similar rules.

3. It is up to you to make the decisions about your property.
If you were to own a condominium, then there would be stiff rules to follow about the decisions you could make with your property. You would be stuck being part of a larger group where you cannot make any real decisions about how the exterior of your home looks. Any upgrades, maintenance, or replacement work would come straight from the HOA – and you might still be stuck with the cost.

One of the most significant advantages of living in a townhouse is that you fully own the property. That means you get to make the important decisions about any upgrades that are necessary. This benefit is possible because it is your responsibility to upkeep the property.

4. You are not alone with all of the maintenance expenses with a townhouse.
When you own a single-family house, then you are completely alone with all of the maintenance responsibilities resting on your shoulders. Townhouses fill the gap somewhat because there are some cost-savings opportunities to consider. Because you are sharing 1-2 walls with your neighbors, there are fewer expenses to manage. You’re still part of a bigger community with the attached-type house without the limitations that a condominium association would place on you.

5. There are lower entry costs to consider with a townhouse.
If you are struggling to find a property that can meet your budgetary needs right now, then a townhouse is an excellent compromise between a single-family house and a condominium. You’ll pay a little more than you would with a condo, but it is much less than a single-family home. Depending on your market, the cost of going this route is up to $75,000 less for comparable space, although you will be sacrificing some yard space to receive this benefit.

Because there tend to be more common areas available with townhouse communities compared to others, you can get the benefits of a playground, picnic area, and open space still with this investment. You are just asked to share it with others.

6. Townhouses typically move faster than other homes if you need to sell.
When you purchase a townhouse, then you are buying a property that targets two potential groups of buyers: first-time owners and families wishing to downsize. That means you can usually move the property faster than you would if you were in a different living situation. The lower price of this option is an attractive feature as well, giving it another buying advantage over a single-family home.

If you can spend a little time soundproofing your unit to avoid the noises of the neighbors, then you might find the value of a townhouse investment is stronger than any other property option that is available to you right now.

7. The association will take care of the outdoor responsibilities in most situations.
When you own a townhouse, then you are responsible for the exterior of the property. If you have a small front or back yard, you must maintain these areas under most agreements. Because you are living in an attached community, there will also be common areas that everyone can use, such as a small park, a playground, gardens, and a lawn. The HOA or equivalent will hire someone to take care of these spaces for you so that you don’t need to worry about the work.

If you like to mow the lawn, do work outside, and be creative with landscaping, then you might see this issue as a disadvantage. Many families find that having others take care of this work for them gives them more time to spend with each other.

8. This option supports families who have a busy lifestyle.
Young families often juggle multiple responsibilities at once. Not only are you running back and forth from work, but you are also taking the kids to soccer practice, traveling to tournaments, running errands, and trying to fit some family time in there as well. If you were to purchase a detached single-family house, then you would need to make more time to take care of your exterior chores. If you own a townhouse, then this problem goes away.

You will receive more square feet for the price if you choose this option over a single-family home. There are fewer responsibilities involved with the exterior appearance of the property. There might not be an option to start a garden, but you could grow one indoors with today’s technologies.

9. You have more security available to you for traveling.
If you need to travel frequently for work or family matters, then your townhouse is going to be just fine by itself. Single-family homes need someone to mow the lawn while you are away, pay for pool cleaning, or manage your pets so that they stay out of trouble. The extra privacy that living in a detached home offers can be an invitation for burglars to let themselves in for a look around.

When you pay HOA fees to a townhouse board, then security is another benefit that you receive. People will see unfamiliar faces lurking around and take action to protect your property. This advantage can even help a leaking roof to get noticed faster or other maintenance issues that can be seen, smelled, or heard to ensure that everyone can be as safe as possible.

10. Most townhomes let you live closer to town.
A single-family home might be in a secluded neighborhood, down a dirt road, or well into the country. Attached dwellings are almost always in the city or on the border of where the suburbs begin. That means you could be closer to where you work, near fun dining and entertainment options, and you could even commute by bicycle or public transportation to eliminate a vehicle expense. Some options include mixed-use zoning where there might even be a restaurant a couple of houses down for you to enjoy.

List of the Cons of a Townhouse

1. Townhomes experience the clustering effect.
Because townhomes are closer to an apartment or condominium than they are a single-family home, you are going to see your neighbors more often in this setting. You’ll probably hear them a lot more too, especially if the walls in your place are somewhat thin. Although the nature of this structure can help to build a friendly and supportive community, there are always going to be a few households which are not very conscientious about keeping the environment and home clean.

If you own instead of rent your townhouse and encounter this disadvantage, then it can impact the overall value that you will receive for your property when it comes time to sell it. That is why it pays to conduct a complete community profile before deciding to move in.

2. It reduces the sense of privacy that you have with your home.
If you were to own a detached single-family dwelling, then you will have a greater sense of privacy with your living arrangement. There can also be a superior sense of ownership associated with a house compared to what you receive with a townhome. Although you’ll have fewer maintenance chores to manage, they will not disappear entirely when you choose this option. You might even find that the annual fees that you pay to support the common areas and structures cost more than what you might pay with an HOA and a house.

3. You are likely asked to contribute a capital contribute fee upon signing.
All townhomes (and condominiums) have monthly maintenance fees that you must pay to take care of the common areas. It is an expense which is similar to that of an HOA, so this issue tends to be a wash when comparing the types of home ownership. What you might not expect from this transaction is called the “capital contribution fee.”

This fee is usually due at the closing or transfer of the title of the townhouse. It can be of any amount, but it is usually three times what the monthly maintenance charge is and assessed consistently with the development according to the bylaws of your association. If you do not see this expense in the MLS listing from your realtor, then ask about it before agreeing to a purchasing contract.

4. There can be lots of floors with a townhouse.
Because townhouses are usually built in places where land is at a premium, they tend to stretch upward vertically to create more space. It is not unusual to see a three-story or four-story unit where there are only 1-2 rooms on each floor. This design creates the need to navigate stairs quite often, which can be challenging for someone with physical limitations. It is an option that is also impractical for families with young children, the elderly, and those with disabilities.

The only way to avoid this disadvantage for some families is to install an elevator system in the home, but there may not be enough room to do so. That means you may not be able to grow old in this type of home, so it is not always the permanent investment that a detached single-family home can provide.

5. Townhouses do not appreciate as fast as other real estate options.
Although there are some exceptions to this rule, you will discover that most townhomes do not appreciate in value as fast as a single-family home. That also means that the value will depreciate slower if there is a housing bubble in your community, but it is not going to be an investment where you’re going to make a ton of cash. There can be a lot of congestion in this space because everyone is on top of each other with the attached structure, so the value of what you get out of this property option tends to be less about money and more about the intangible things in life.

6. You may need to respond to neighbor complaints about trivial things.
If you decide to make a lot of curry dishes while living in a townhouse, then your neighbor who hates the smell of it could file a complaint with your governing association. Other activities that you can do on your property if there is privacy, such as nude sunbathing, are also restricted or subject to the grievance process for your community. Since a failure to respond could result in a lien placed on your home, you are forced into a situation at times when you must make time to answer complaints – no matter how ridiculous some of them might be.

7. There are limited storage options available for you.
If you like to decorate for every holiday, have kids with lots of toys, and need space for a few bicycles and extra stuff, then a townhouse will not have the closet and storage room that you require. You will need to rent an additional storage unit to manage all of your items. A single-family home can provide attic space, basement areas, and a garage in some instances that will help you to manage your items.

Townhouses don’t even usually offer outdoor space to store play items for your kids or pets, much less any recreational items you might want to use. Larger families typically need these benefits, which is why this real estate option can be a disadvantage at times.

Verdict on the Pros and Cons of Townhouses

A townhouse is an excellent option to consider if you are a first-time home buyer or are wanting to downsize. You can still take advantage of the benefits of ownership, including any tax benefits that come with that status, while reducing the amount of maintenance that is necessary to keep your home in good repair and with excellent curb appeal.

Townhouses can even provide you with common areas that can help you to enjoy the outdoors while you enjoy this convenient style of living.

There might be two groups of buyers available to you with this option, but the pros and cons of townhouses also show that these properties can be challenging to move sometimes. A powerful HOA that can control many decisions could make it problematic to sell in the future. That is why a thorough inspection and complete review of your documentation is necessary to ensure that you can get the best deal possible.