What Is a Townhouse?

Article Summary:

Townhouses are popular in urban areas and major cities, where land is scarce and prices are high. They can be a good option for people who want to live in a city, but don’t want to pay the high prices for a single-family home. Though this type of housing offers many benefits, there are also disadvantages that need to be taken into account before making the commitment to purchase.

Are you looking for a way to live that is more cost-effective, social, and requires less maintenance? Then townhouses could be a great option for you.

Townhouse living means that your home is part of a complex of homes in one building or on the same property with shared walls. This type of housing offers benefits such as lower maintenance costs and ready access to communal areas like pools and tennis courts. For families looking to downsize or retirees seeking housing with a sense of community, townhouses can make much more sense than traditional detached homes.

In this article, we’ll explore some more of the pros and cons of townhouses, how they compare to other housing options, and whether townhouses could be a good fit for you.

What is a townhouse?

A townhouse is a type of multifamily home with its own private entrance that also shares walls and other common areas with other townhouses in the same development or subdivision.

These types of properties have been around since the 1600s and quickly became popular with the increasing cost of single-family houses. They are particularly well-suited for young families or couples who want more space than an apartment can provide but don’t want the expensive cost and maintenance associated with a detached home.

How does a townhouse differ from a row house?

Upon hearing both descriptions, many people believe townhomes and row houses are the same. While these developments have several similarities, there is one major difference.

While both townhomes and row houses are individually owned units that share walls with their neighbors, the buildings’ exteriors differ. Whereas townhomes have varying appearances, row homes have a uniform look across the entire stretch of properties.

Townhomes vs. Row houses

What are the pros and cons of townhouse living?

Before making the decision to move into a townhouse, it’s important to weigh the pros and cons. Though townhouses may offer many of the same benefits as traditional detached houses, they can often come with some downsides as well.

Here are some advantages and disadvantages of townhouse living to help you make a more informed decision.


Consider these benefits and drawbacks.

  • Low-maintenance: Townhouses typically require far less exterior maintenance than single-family homes. This is because they often come with communal areas that are taken care of by the homeowners association (HOA).
  • Townhouse communities: If you enjoy getting to know your neighbors, townhouses may be a great fit for you. With shared spaces and common areas, townhouses offer a better sense of community compared to single-family houses.
  • Affordability: A townhouse is generally more affordable than a traditional detached house, especially in high-cost areas. This can be a major perk for first-time homeowners who have a tighter budget in terms of financing for a house.
  • Amenities: If your townhouse is a part of an HOA community-based property, it’s very likely that it includes amenities like pools, clubhouses, and even playgrounds.
  • Lack of privacy: If you’re looking for a big yard with plenty of space to spread out, a townhouse might not be right for you. Additionally, since townhouses are typically attached, you may not have as much privacy as you would in a single-family home lifestyle.
  • Subject to HOA rules: The homeowner association collects monthly dues that can be quite expensive. Moreover, violating the HOA’s regulations can result in hefty fines.
  • Limited style choice: Because the homeowner association sets rules in regards to exterior appearances, there’s limited style choice when it comes to design. On the other hand, a single-family house allows you the freedom to do so without restriction.
  • More noise: Because you’re sharing walls with other tenants of the complex, there will inevitably be more noise. This is especially true if the sound insulation of the walls isn’t up to par.

Is a townhouse right for me?

Many people are attracted to the idea of living in a townhouse because they think it will be a cheaper alternative to buying a detached house or renting an apartment. But is it right for you? Ask yourself these questions:

  • How much space do you need?
  • What kind of neighborhood do you want to live in?
  • Do you value privacy or a sense of community more?
  • What can you afford?

Townhouses come in all shapes and sizes, so it’s important to figure out how much space you really need. Moreover, because townhouses offer less exterior space than traditional homes, there’s less privacy but also less maintenance. However, if you prefer a neighborhood with a strong sense of community, you might like the living style that townhouses provide.

How to finance a townhouse

Most importantly, think about what you can afford. Does it make more financial sense for you to continue renting apartments or to get a mortgage for a townhouse?

Though a townhouse differs from a single-family home in many ways, both take a lot of financial planning. Not only is a mortgage likely necessary, but a preapproval letter goes a long way for sellers of both properties.

We recommend speaking with and comparing rates from at least three different mortgage lenders before committing to a townhome property. Take a look at some of the lenders below to get a better idea of what your mortgage rates may look like for a townhome.

Should I rent or buy a townhouse?

Renting or buying a townhouse can be a difficult decision because there are pros and cons to both options.

  • No repairs or maintenance
  • Move whenever you want
  • Some landlords pay HOA fees
  • Great way to build equity
  • Increase net worth
  • May be cheaper in long run
  • May be more expensive overall
  • Might not have control over living space
  • Costly initial investment
  • Maintenance and repair responsibilities

What should I consider when buying a townhouse?

It’s always important to make an informed decision before buying a property. Townhouses are unique in that they can offer homeowners both the convenience of living in a walkable community and the privacy of their own homes.

However, there are some things to consider before making the leap into this type of housing.

Homeowners associations

Homeowner associations are a part of most townhouse living, but they can also be a bit of a headache. Before buying a townhouse, it’s important to take into account the rules and regulations enforced by the HOA.

These associations can dictate everything from what color you’re allowed to paint your house to how many cars you can park in the parking lot. If you’re not comfortable with the rules and regulations set by them, it might be best to consider other types of housing.


As with any major purchase, it’s important to keep your budget in mind. Consider how much the mortgage would be and whether it’s a good investment for your financial situation.

Keep in mind that your budget should also include HOA fees. The fees can range anywhere from $100 to $1000 a month, depending on the property and community. Typically, the more amenities and services your community offers, the higher the monthly HOA fees.

Privacy issues

When you buy a townhouse, you’re buying more than just four walls and a roof. You’re also buying into a community, and with that comes a certain amount of shared space and privacy. Therefore, it’s important to think about whether the townhouse layout will allow for the level of privacy you need.

For example, are the common areas in the front or back of the house? Will people walking by be able to see into your windows? How close are your neighbors?

Community amenities

When looking for a townhome to buy or rent, it is important to take community amenities into consideration as well. Amenities can include anything from a pool to a playground. If you have young children, you might want to opt for townhouse complexes that have a playground. If you are a fitness enthusiast, you might prefer communities that include pools or gyms so you can work out regularly.

Amenities can add value to your life and make living in a townhouse even more enjoyable. However, the upkeep of these facilities may result in larger HOA fees. Make sure to ask about the availability of these types of amenities when touring different communities so you can find the right one for you.

How does a townhome compare to other kinds of housing?

Upon hearing a townhome is a form of multifamily housing, you may think it shares many features with apartments or condos. However, there’s quite a few differences.

Is a townhouse considered an apartment?

No, a townhome would not be considered an apartment due to its structural and organizational differences. First, a townhouse is usually two or three stories high, while an apartment is usually just one level. Townhouses also tend to be larger than apartments, with more bedrooms and bathrooms.

And finally, compared to an apartment, a townhome resembles a traditional house much more. Mostly because it comes with backyards or gardens, while apartments don’t.

What is the difference between a condominium and a townhome?

Townhouses are often considered more spacious than condos and may come with private yards or garages. Condominiums, on the other hand, are individual units within a larger complex. Ownership of a condo entitles you to exclusive use of your unit, as well as shared ownership of any common areas. However, instead of yards or gardens, condos typically have more individualized spaces such as balconies or patios.

In terms of cost, condos are generally cheaper since you do not own the land attached to the unit. However, condo owners typically pay higher mortgage rates since condominiums are a form of shared ownership. In this case, lenders have to take on more risks since one bad apple can have a negative effect on the whole building.

Is a townhouse a terraced house?

Yes, you can consider the terms ‘townhouse’ and ‘terraced house’ interchangeable. In the United States, we tend to refer to conjoined units where owners share one or two walls as townhouses. In the United Kingdom, it is more common to use the term ‘terraced house’ to describe these types of properties.

Key Takeaways

  • A townhome is a connected row of narrow and separate houses built side-by-side.
  • Most townhouses are governed by HOAs, so it’s important to take that into consideration before purchasing or renting.
  • Townhouses can be a great option for those who seek a sense of community and belonging in their living space.
  • Buying a townhouse can be a great way to build equity and increase your net worth. On the other hand, renting allows for a greater degree of flexibility and less commitment.
  • Before purchasing a townhome, it’s important to factor in monthly HOA fees. It can vary greatly depending on the property and community, so make sure to do your research.
  • Townhouses are typically less expensive than traditional detached homes. However, they also tend to be far smaller in terms of square footage and outdoor space.
View Article Sources
  1. Condominiums/Townhomes — Montana Secretary of State
  2. Are There Cheap Denver Homes Out There? Yes, If You Count Townhomes — CPR News
  3. 2021 Mortgage Industry Study — SuperMoney
  4. Best Mortgage Lenders | February 2022 — SuperMoney
  5. Home Purchase Mortgages: Reviews & Comparisons — SuperMoney