Town homes vs multi-family

[Lucas Hannon]

Hey everyone, I’m looking into house hacking and noticed something. In my area, condos and town homes are listed around 70 to100 thousand, while multi-families like duplexes - fourplexes are more like300 to 400 thousand. It makes me wonder if I’m missing something. Wouldn’t it be cheaper to get into a townhome even if I’m not house hacking since I wouldn’t need as much capital? And it would help me just get something under my belt to start. Maybe do some cosmetics if needed and sell it or simply rent it out. 

Everyone has told me house hacking is the way to go which makes so much sense since I’m in theory getting rent paid for me while owning a property and building equity. 
This makes me think there's more than meets the eye with the town homes. maybe downsides like HOA fees, rental restrictions, financing, or appreciation? For those who have invested in both, why choose multi-family over a condo or town home if the purchase price is so much lower?

Thank you!

[Richard F.]

Condos, Townhomes (as defined for Houston), and Multi-Fam apartment buildings are three entirely different animals, each with different applicable laws as to the responsibilities of the owner. 

Apparently in Houston, townhomes may, or may not have an affiliated "Association" that bears certain responsibilities. It appears that those associations do not meet the "fiduciary" level that is the norm for Condos. That means, there are even fewer incentives for those in charge to be operating properly and efficiently with YOUR dollars.

Condos are very complicated, and in fact most agents, Board Members, PM's or other apparent experts truly understand the full legal and financial picture of condos. You, as an owner of a condo, have to abide by the Declaration, which informs primarily on your responsibility for the structure and systems and the delineation of your space and percentage of common area ownership for each unit. The By-Laws inform on a number of routine activities such as elections/voting and quorums, meeting notices, rules and how, or if, they can be changed, financial constraints if any, as well as how to fund and establish reserves, who is responsible to develop an operating budget (the Board) and much of the day to day activities. Financial documents and reports include the Annual Budget, the Reserve Funding Plan, a Reserve Study, and meeting minutes for the past 12 - 18 months to determine what might be "in progress". 

You can never compare one condo project with another, either next door or in the next city, in terms of the monthly fee, cash "assets", or any other criteria. Every one is different, with different elements, different Boards, different vendors and contracts, different land areas and amenities, and differing goals of their Boards.

Multi-Fam properties, fee simple, are far simpler. Yes, the can seem to cost more, but the owner has 100% control of spending and saving, whereas with condo/townhome associations, that is not the case. Additionally, the latter usually spread the cost of certain elements out among all of the owners and use construction methods that minimize waste and duplication. The problem is, no matter how a structure is built, all else being equal, they will all wear out or deteriorate in a very similar timeframe, requiring major updates or replacements for every element, from sewer lines to roof, and everything in between. The only difference is whether or not the owner(s) utilize preventative maintenance practices, or defer all maintenance as long as possible to simply extract cash/minimize the monthly "fee".