Buying Your First Property - Townhouse vs House

Overall a stick-built single-family home will appraise over time at a higher rate than a townhome or condo. However, for a starter property a townhouse or condo is perfect if you are both working professionals, don't have time or resources to do building maintenance, don't need a lot of garage storage space, and just want to get out of paying rent.

Most important is talk with a lender and find out what you can afford in mortgage. Keep in mind that with ownership, you will have the monthly expense of mortgage, property taxes (approx. 1.2% of the sales price annually), homeowner's insurance, and utilities, plus a side budget for repairs and maintenance. Depending on your target neighborhood market, you may be able to afford a large townhome for the same monthly cost of a small, starter home.

A townhouse or condo has a governing association (HOA) that commonly provides various utilities and building fire insurance to owners in the community. Some HOAs have very low dues ($50/month), and provide limited community services such as road maintenance or garbage service. If the HOA provides water, garbage, fire insurance, gardening--the works--usually their monthly dues will be $200 to $350. Before you buy a TH or condo, find out what the monthly dues are and factor that into your decision.

Any property in a development that has an HOA will have rules and regulations or CC&Rs. Make sure you get this documentation and read through it. If you have an at-home hair styling business you may be limited by the parking and number of daily visitors you can have if you live within an HOA-governed community.

If you live in the bay area and you would like to discuss your home purchasing options, please give us a call. We can help you determine your purchasing budget, and help you review the options with your long-term investment strategy in mind. Click here to conect to our main real estate home page.