Row of townhouses in Virginia.

Townhouse: Everything You Need To Know

Sidney Richardson7-minute read

October 07, 2021

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Finding a place to call home can be a lot more challenging than it sounds. With so many options and so much to consider, you might be struggling to decide what kind of abode will work for you or your family. If you’re looking for something a little more affordable than a detached single-family home and don’t mind sharing walls with your neighbors, you may want to consider a townhouse.

But what is a townhouse? Let’s dive into what this type of home is, what makes it unique and why you might want one yourself.

What Is A Townhouse?

A townhouse, also called a townhome, is a type of house that has multiple floors and shares at least two of its walls with other residences. These buildings are often tall yet thin and attached to other townhomes in a long row. They’re most popular in urban and suburban areas.

Townhomes are usually individually owned, have their own entrances and may include some outdoor space as well. This type of home also may or may not be part of a homeowners association (HOA), which means there could be rules in place for what you can and cannot do with the exterior of your townhome – plus HOA fees, which can sometimes be costly (potentially $100 – $1,000+ per month).

Despite the potential fees and living in close quarters with neighbors, townhomes remain a popular housing choice for many reasons, from being typically more affordable than detached single-family homes to their access to amenities such as pools and gyms.

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Pros And Cons of Buying A Townhouse

Why should you live in a townhouse? Let’s break down some of the pros and cons of townhouse living to help you decide if it’s the right choice for you.

Townhome Living Advantages

  • Accessibility to amenities such as pools, community areas and fitness facilities. Similar to an apartment or condo, townhouses often have access to community or homeowners association amenities, which might include things like parks, pools and even community gyms.
  • You’re able to change the interior and exterior. Townhomes are like a blend of condos and detached single-family homes. Usually, unless an HOA rules otherwise, you have the freedom to change anything you want, interior or exterior, about your home.
  • More affordable for first-time home buyers. Townhomes tend to be more affordable than single-family homes since they are attached and often lack the yard space that those with detached homes tend to pay for. If you don’t mind sharing walls with neighbors, you can potentially get more space for your money this way.
  • Less work to maintain. Since they often lack large yards and are typically attached at the sides to other units, townhouses require much less external upkeep than other homes. If your townhome is part of an HOA, you actually may not have to do any external upkeep at all.

Townhome Living Disadvantages

  • Lack of privacy: Since townhomes share walls with the residences next to them, you unfortunately will have to sacrifice a little privacy to live in one. When you live in close quarters, loud neighbors might become an issue.
  • HOA fees and restrictions: While not every townhouse is part of an HOA or subject to regular HOA fees, many are – which can be a definite downside for potential home buyers that don’t like the idea of being restricted by an HOA.
  • Resale value: In some areas, townhomes might sell for less than single-family homes or to a smaller pool of potential buyers. Before you buy a townhouse, you may want to look into the market where you live to help determine whether it would be a worthwhile investment for you in the long run.
  • Smaller living space: While townhouses typically have multiple floors, they are usually not very large in terms of square footage. Additionally, living in a home split among multiple floors can become a problem in terms of mobility and accessibility, especially for older home buyers.

Townhouses Vs. Other Types Of Homes

When buying a townhouse, many potential home buyers are curious what differentiates a townhome from a condo or single-family home. Townhouses share many similarities with both, which can make them a “best of both worlds” option for buyers eager to have their own space but willing to live closer to neighbors or sacrifice yard space.

Let’s break down the key differences between townhouses and both condos and single-family homes to better explain what makes townhomes so unique.

Condo Vs. Townhouse

There are actually a lot of similarities between condominiums, or condos, and townhouses. While they don’t have to be, condos are also often attached via one or two walls to other housing units and are typically governed by an HOA. Townhomes and condos, unlike apartments, are also both owned separately by their individual homeowners rather than a landlord. Additionally, these types of homes both likely have access to community amenities.

Townhomes, however, are defined as single-family dwellings that happen to share walls with another home (or two). Condos, on the other hand, are single units that make up part of a larger building or community. Townhomes are considered to be more private than condos and typically enjoy more homeowner freedoms. While a condo’s HOA might rule that the exterior of a condo is entirely out of the homeowner’s control, townhouse owners may have the freedom to do whatever they’d like with the exterior of their home and any outdoor space attached.

Where a condo might handle any and all maintenance outside of a home, townhouse HOAs might also require that occupants take care of outdoor tasks themselves. So, with a condo, you can expect more things to be taken care of for you by your HOA, essentially, while townhouse owners will be responsible for more maintenance tasks themselves.

Single-Family Home Vs. Townhouse

While condos and townhouses share a lot of similarities, buying a house and buying a townhome really aren’t so different, either. A townhouse is a good combination of a single-family home and a condo, so it shares features with both types of housing. A townhouse and a single-family home are both considered single-family dwellings and operate less like apartments than condos do. Owners of both these types of homes also share a responsibility to take care of their own maintenance tasks, indoor and outdoor.

Townhouse owners, however, may be responsible for less maintenance and upkeep than single-family home owners. Though not every townhouse is part of an HOA, many are – and many HOAs take care of various responsibilities that single-family home owners would have to deal with themselves, like shoveling a driveway or tending to landscaping.

Single-family homes may also be located in more rural locations than your typical townhouse. Townhomes are often found in urban or suburban areas and tend to be newer and more recently updated than single-family homes. Single-family homes also commonly have much more yard or outdoor space than townhomes have room for.

Townhomes work well for those eager to live near the city and willing to sacrifice outdoor space and privacy. Single-family homes, on the other hand, might appeal to home buyers that appreciate a little space between themselves and their neighbors.

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Townhome FAQs

Still have questions about townhouses? Let’s take a look at a few common townhome concerns you might have when considering calling one of these multi-story houses your home.

Should you rent or buy a townhouse?

If you’re debating renting or buying a townhouse, consider all the pros and cons of becoming a homeowner the same way you would if you were purchasing a traditional home. Consider what you can afford, how big of a down payment you can make, how long you want to live there and whether you can afford to take care of potential maintenance concerns yourself.

If you’re a potential first-time home buyer and have only rented in the past, remember that there will likely be more maintenance costs involved with taking care of this type of home than something like an apartment – though likely less additional costs than you would pay buying a detached single-family home. If you’re unsure that you can afford to make a down payment as well as handle utility, insurance and maintenance costs yourself, renting may be a better option for you.

For help calculating your potential mortgage costs, use the Rocket Mortgage® calculator.

What are the best areas for a townhouse?

The best area to buy a townhome depends on the person buying it and their specific needs for a house. Consider your own needs in a home – do you want to be close to lively areas of the city or would you rather live in a quieter, more family-oriented neighborhood?

Consider that HOAs in different areas might operate differently too. If you want to live somewhere where your lawn will always be taken care of for you, that’s something you’ll want to ask about when exploring properties. Don’t always assume townhomes will be part of HOAs that handle everything. Many townhouse HOAs aren’t responsible for exterior maintenance of occupants’ homes.

Consider the growth of an area you’re considering moving to, as well. If a neighborhood is quickly expanding, you may be able to build equity faster and potentially sell your home sooner than if you chose to live in an older neighborhood with no new development in demand.

For help deciding what neighborhood to live in, Rocket Mortgage recommends working with a knowledgeable real estate agent or REALTOR®.

What type of mortgage do you need to finance a townhouse?

Similar to buying a traditional home, there are multiple types of mortgages available to potential townhome buyers. In fact, for the most part, financing a townhome is essentially the same as financing a detached single-family home. Unlike getting financing for a condo, where there might be concerns or restrictions regarding the condo development, getting a mortgage for a townhome is pretty straightforward.

If you’re a first-time home buyer, you may want to consider an FHA loan, which has looser financial requirements than some other mortgages and can be more accommodating for aspiring buyers trying to get their foot in the door to homeownership. HomeReady and Home Possible loans available through Fannie Mae and Freddie Mac respectively may also be good options for first-time home buyers or those that may not have perfect credit.

If you have solid credit, conventional loans are always an option, too, and often don’t require large down payments – some conventional loans require as little as 5% down.

If you’re unsure what kind of loan you can qualify for, read our guide to how much house you can afford.

The Bottom Line: Townhouses Come With Both Perks And Pitfalls

A townhouse is a unique type of home that offers many of the benefits of both condo and single-family home living. This type of home is perfect for potential buyers that want more privacy and freedom than a condo but maybe not all the upkeep responsibilities that come with buying a detached single-family home.

Before buying a home, it’s important to consider all of your housing needs and do your research to decide what will work best for you. It’s always a good idea to consult a real estate agent if you’re unsure a townhome is the right choice for you.

Ready to buy a home? Get started online today with Rocket Mortgage.

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Sidney Richardson

Sidney Richardson is an intern writer covering homeownership, mortgage and lifestyle topics. She is a senior at Oakland University pursuing a degree in journalism and advertising.