Single Family vs. Townhomes

West Chester, PA · Member since 2012 · 14 posts · 0 votes

Would you purchase townhomes with their home association fees and rental restrictions? Or would you stick solely to single family residences? I'm asking because townhomes are cheaper than single families.

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Don KonipolBusiness Member

Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes

14y

First of all it depends whether you are talking about as a personal residence or as an investment property? If personal residence, you may want to live in an in-town area where SFR are not readily available or land too expensive. As an investment it depends on whether you are holding or flipping.

I invest in class A high rise condos - less than 5 years old. Iam currently able to purchase such in downtown/midtown Phoenix, Tempe town lake, and downtown Scottsdale for $150-$200 per square foot - and rent them out for $1.50 - $2.00 per square foot per month. While this results in about a 6-7 cap, I'm purchasing for prox 1/2 the cost to build, with a product in limited supply and increasing demand by both empty nesters and young urban types. I'm counting on inflation protection, increasing rents, and above average appreciation. In 10 years I'll tell you if I am right!

Private Mortgage Financing Partners, LLC

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Shari Posey
Residential Real Estate Agent · Long Beach, CA · Member since 2008 · 432 posts · 63 votes
14y
If you can afford a single family home in a good location go with that. In California, condos and townhomes are much harder to get financed, for example, FHA won't work for most of them so resale down the line will be harder. Also these days there are quite a few homeowners delinquent on HOA dues which have to be paid by someone--YOU the homeowner who is current through dues increases.
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Account Closed
Landlord · Seattle, WA · Member since 2010 · 3k+ posts · 1k+ votes
14y
Interesting that this topic came up. For the first time yesterday I came across a townhome that had no HOA dues or rental restrictions.

The HOA dues and restrictions are often a reason I would choose to avoid townhomes and condos. There are other reasons as well. The possibility of sizable assessments would be at the top of the list. You can have neighbor issues such as repairs that might be needed on common walls or roof.

For me though the biggest factor is that condos and townhomes don't fit my investment model. Generally speaking there is very little you can do with a townhome other than leave it the way it is. As the building ages the potential problems of this type of property will grow.

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Don KonipolBusiness Member
Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
14y
First of all it depends whether you are talking about as a personal residence or as an investment property? If personal residence, you may want to live in an in-town area where SFR are not readily available or land too expensive. As an investment it depends on whether you are holding or flipping.

I invest in class A high rise condos - less than 5 years old. Iam currently able to purchase such in downtown/midtown Phoenix, Tempe town lake, and downtown Scottsdale for $150-$200 per square foot - and rent them out for $1.50 - $2.00 per square foot per month. While this results in about a 6-7 cap, I'm purchasing for prox 1/2 the cost to build, with a product in limited supply and increasing demand by both empty nesters and young urban types. I'm counting on inflation protection, increasing rents, and above average appreciation. In 10 years I'll tell you if I am right!
Private Mortgage Financing Partners, LLC
Website View Page
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