The definitions of a townhouse may vary from state to state. In North Carolina, a townhouse is very similar to a condo except you own the land directly underneath and are attached to another unit on at least one side. It differs from a condo in that you own more than just the airspace inside and you actually own some land.
What are the advantages of buying a townhouse? Below are some advantages that will help you with your decisions.
Owning a home comes with tax advantages, amortization, and appreciation benefits as well. Townhouses have a tendency to be more affordable than similar sized detached homes in the area. This is attractive to first time home-buyers or anyone on a tight budget. Keep in mind you will still have to pay real property taxes and will be responsible for HOA dues and assessments.
Does the thought of spending a Saturday cutting the grass or cleaning the gutters make you cringe? A lot of HOA’s will cover the expense and hassle of coordinating these activities. Generally, you will have less maintenance than a single family home and have more free time to pursue other activities. Overall, you will be paying to maintain the property through the HOA dues and assessments but you won’t have to worry about dealing with contractors. Remember to read the HOA documents thoroughly so you know what your responsibilities are.
No One Above You
Townhouses are generally multistory where units are not stacked upon one another. There are exceptions, but generally you won’t have to worry about heavy footsteps above you. You will be sharing at least one common wall with another unit. Usually there is a stone wall called a “fire wall” between units that should insulate you from most noises.
It is absolutely critical that you read every last work of the HOA guidelines and restrictive covenants. You must thoroughly understand what you can and cannot do as a homeowner. HOA’s have a lot of authority and can impose monetary penalties for noncompliance. They also have the right to foreclose in the event of default on dues. Be thorough when getting all the relevant docs from your realtor. Most can be found online or downloaded as a PDF.
Don’t expect your townhouse to appreciate at the same rate as surrounding detached houses. If you think your job may transfer you within the near future, it may be better to wait before committing to a mortgage on asset that does not appreciate as quickly.