Townhouse vs SFH Thoughts?

9 Replies

Hi All,

I am looking into purchasing my first property as a househack. I found a townhouse that I like the numbers for as a rental (after I fulfill my living requirements for loan). However, it is priced similar to SFH in the area. Thoughts on this? What should i be aware of? Just that the townhome will appreciate to a lesser extent to a SFH, but if I'm looking to keep it as a cash flowing rental, then just to go for it? Thanks!

Are there condo fees with the town house?  If so, go for the single family.  As for appreciation, it all depends on the market and house prices.  If it is a soft market, they will be harder to sell.   If house prices are really high, people will start in townhouses and condos, so you'd be looking to sell to first time buyers or investors.

Promotion
Innago
Property Management Software
Manage Your Rentals Better For Free. Save Time & Money.
Easily Collect Rent, Screen Tenants, Sign Leases, List Properties, Manage Work Orders, & Much More!
100% Free Try It Now
Originally posted by @Theresa Harris :

Are there condo fees with the town house?  If so, go for the single family.  As for appreciation, it all depends on the market and house prices.  If it is a soft market, they will be harder to sell.   If house prices are really high, people will start in townhouses and condos, so you'd be looking to sell to first time buyers or investors.

Thank you for the feedback! No condo fees. So value will rise somewhat in comparison to SFH in a competitive market? If the numbers make sense I should just go for it?

Originally posted by @Danielle Jackson :

Is it a strong rental market? What are rent growth expectations? What does cash flow look like based on these numbers with SFR versus condo, taking into consideration all fees (if any)?

Rental numbers look like over break even at the moment, but I am planning to househack it. And I guess I haven't asked myself those other questions: where can I find out if it's a strong rental market and growth expectations?

Originally posted by @Christopher Murphy :
Originally posted by @Theresa Harris:

Are there condo fees with the town house?  If so, go for the single family.  As for appreciation, it all depends on the market and house prices.  If it is a soft market, they will be harder to sell.   If house prices are really high, people will start in townhouses and condos, so you'd be looking to sell to first time buyers or investors.

Thank you for the feedback! No condo fees. So value will rise somewhat in comparison to SFH in a competitive market? If the numbers make sense I should just go for it?

 No one has a crystal ball for prices.  If you plan on holding it long term and the numbers are good, go for it.  Do your best with negotiations (be fair, but this is where saving money pays off).  Appreciation with housing is the icing on the cake-great if it happens, but don't rely on it.  Also remember over time costs will go up (property taxes) as will rent.

Originally posted by @Christopher Murphy :
Originally posted by @Nicole Heasley:

Does the townhome have an HOA?

It does not have an HOA. I typically stay away from condos and townhouses due the HOA being a deal killer.

That's why I asked! Glad to hear you can operate freely. That being said, considering it's your first deal, if the numbers work, go get it. The first deal is more about taking action than anything else. 

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

We hate spam just as much as you