Townhouses and condos help many people fit real estate investing into their budget, and they provide lower maintenance options compared to single family housing. Townhomes and condos are often located near urban centers, offering easy access to high-volume employers or nightlife without the commute, both attractive assets for renters.
The differences between townhouse communities and condominiums fall into three main categories:
In most cases, condos offer more amenities than townhomes. Think of an apartment complex; there’s usually a swimming pool, a gym or fitness center, and a community room. Condominium buildings are often set up the same way. Townhouse rentals may offer a swimming pool, but they usually lack fitness centers and community rooms.
A townhouse owner owns the structure and the land it is on, but it is not free standing. A condo owner owns the unit inside of the drywall, and they may own a percentage of the common areas (parking lot, hallways, shared amenities). The different types of ownership are outlined in official community documents and HOA documents. Investors who are interested in townhouse rentals and condo rentals should be aware that there is no standardized form of ownership. The only way to verify the information is by requesting it from the association that manages the community.
Townhome and condo communities are managed by Homeowners Associations (HOA). HOA fees vary; they are usually listed on the MLS listing when a unit is for sale.
Condo HOA fees are usually higher than townhome communities because the HOA takes care of more items. A condo HOA may be responsible for:
Townhome HOA fees are usually higher than single family HOA fees, but lower than condo fees.
Townhome HOA fees may cover:
When offering a townhouse rental or condo rental as a landlord, you will be paying the HOA fee in addition to the mortgage payment.
If you are considering investing in real estate with a townhouse rental or a condo rental property, an experienced Realtor can help locate information that will help you make the right decision.