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Advice on buying a townhouse?

Dear Daily Paul,

I have a friend who is in the market to buy a townhouse. He is a first time home buyer, and is understandably a little uneasy about making the plunge. Any advice / experiences / cautions that you can give would be helpful.

As Robert Kiyosaki points out in Rich Dad Poor Dad, you shouldn't think of the home you live in as an 'investment.' It is a consumption item, that will increase your expenses in terms of taxes, maintenance, repairs, upgrades, etc. Beyond this does anyone have any experience specifically with townhouses?

I don't know exactly how a townhouse differs from a condo, but when we bought a condo, our lawyer advised that "it is like going into business with every other owner in the complex."

And how! Again, I can't speak for a townhouse, but I think there are some similarities. With a condo, there are shared responsibilities for common areas - hallways, laundry room, parking lot, grounds, etc. Someone has to manage landscaping, snow removal, roof repair, etc. So you want to make sure that your fellow owners are responsible people. With a condo, you have a monthly condo fee, which you want to minimize. There can also be special assessments to fix major common area issues - like repaving a parking lot ($20,000) or putting on a new roof.

How you use your property is governed by rules of the condo association. In some cases, you're not allowed to rent out your own unit, for example. This is a double edged swords, as high owner occupancy makes for a better environment. On the other hand, if you have to move - to take a job in another state, or if you just want to move up - you're not able to rent out your unit (which makes one wonder if you actually 'own' it at al).

These are a few observations off the top of my head. If anyone has others, I'd be most appreciative of your input.



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I agree with Smudge. My

I agree with Smudge. My advice on buying a townhouse or any other "real" estate: DON'T

I used to "own" a nice house that I didn't own. Now I rent a nicer house from someone who doesn't own it, either.

All the normal, common ideas about equity and long-term investment are really a bunch of nonsense. There is no such thing as equity in reality, it's made-up banker nonsense. How can a house be an investment? Oh that's right, cuz property values only go up, right? (so I've been told by everyone). Property values really don't rise but their value relative to dollars does rise due to inflation because the dollars are worth less. Sounds like a solid investment worth spending the bulk of my lifetime income on.

Really, there isn't too much of a difference.

Usually, with a townhouse, you own not only the walls but, the land underneath the dwelling, which is always a good thing. With a condo, you own the air between the walls and because you don't own any land, if the owner of the land (often a developer, unless they've sold it to the condo association) decides he can make more money turning all that land into an office complex or a shopping mall, you're left with Jack Schitt.

I think the main difference between the two is just the style of the dwelling. Townhouses are usually a in row of identical homes, with ground level entrance. A condo unit can be on any floor level and is like a box nestled in between other boxes.

Another benefit of a townhome is that you have more privacy than with a condo.

Other than that, I can't think of anything else that would matter.

Just thought of something else that is important, whatever kind of home you buy.... buy PRE-1980 construction!!!!! After that, they skimped on building materials.

“It is the food which you furnish to your mind that determines the whole character of your life.”
―Emmet Fox

I would not buy any home that I did not own the land under it

IMHO.

I owned a Condo as well

I served as president on the board of directors.

I would never buy into another association again.

"A great civilization is not conquered from without until it has destroyed itself within" W. Durant

scawarren's picture

There is no way I would buy a

There is no way I would buy a townhouse or condo but I'm private that way; I don't want anyone to see me and I don't want to see them.

It is easier to fool people than to convince them that they have been fooled. – Mark Twain