Thoughts on townhouse rentals, for first property?

8 Replies

Good morning! Apologies if this is in the wrong category as I am still new to this. So If you have read my bio or other post you would seen I’m only 19 but eager to get started. I have been looking for many deals for a while now. I have found some townhomes in the area for about $65,000-85,000. I got a little money saved up. Now for a first timer would anybody recommend buying a townhome and renting it out to start? Rent around the area for townhome is a bout $1200/month. For the most part HOA fees vary from $250-$320.

Hi Muhammad,

You are asking good questions. Run your numbers including the HOA and see what you get. You'll also need to know if the housing association has any rules about not renting out their homes. I have heard of that being an issue with condos. I'm a bit of a control freak so I prefer single family where I am in charge of the capital expenses, but I know people do well with townhomes. Find your local real estate investment group and there will be someone there who has done what you want to do and can answer questions. Good luck!

Muhammad, my first two investment properties were townhouses....and I still have them. My second one was a good deal as it was a VA foreclosure property I picked up in 2014. They stay rented out, have had very low maintenance, but they both have HOAs. So make sure to run all the numbers as others have mentioned...this will ensure you have reasonable cash flow. If you can, snag an end unit as those are attractive rentals...another bonus might be one with a garage.

@Muhammad Elzeibagh all of my rentals are "Townhouses" we call them row houses in Baltimore. Certainly they can be a fine investment. The bigger issue is whether there is an HOA and what their rules are.

The problem with HOAs and Condo Associations is you have no control over costs of the fees. They often have rules about the percentage of units that are rentals.

A townhome is an "easy" investment because there's less exterior maintenance to deal with, you have a lot of people keeping an eye on your property and reporting problems or violations, etc.

On the other hand, the HOA could suck and do a terrible job at maintaining the property which results in depreciating value, bad tenants, difficulty renting, etc. Or they could be Nazis that harass you with even the slightest violation and it scares tenants off.

My first investment was a townhome. I put $8,000 of my own money into it at the beginning and then sold it eight years later with a profit of $73,000. It was clearly worth it.