A townhouse, or townhome, is a home that shares one or two side walls with neighboring homes, usually in a row. Each townhouse typically has two or three floors, its own front door at ground level and often a small yard, patio or garage. It feels more like a house than an apartment, while taking up less land than a detached home.
How townhouses are owned
Townhouse describes the building style. The ownership can take two main forms:
- Fee simple. The owner owns the structure and the land beneath it, often with a small front and back yard. An HOA, if there is one, usually maintains shared grounds and sets exterior rules.
- Condominium. The owner owns only the interior space, and the association owns and maintains the structure and land. See condo vs. townhouse.
The deed, plat and governing documents tell you which form a particular townhouse uses. It matters, because it decides who pays for the roof.
Typical features
- Two or three floors, with living space on the main floor and bedrooms above
- Shared side walls, so end units get more windows and often rent for more
- A private entrance, and sometimes an attached garage
- Small outdoor space, such as a patio, deck or yard
- Shared community grounds and amenities, if there is an HOA
Renting out a townhouse
Townhouses appeal to renters who want more space and privacy than an apartment without the upkeep of a detached house. For landlords, they sit between a condo and a single-family home: usually lower cost to buy than a detached house nearby, with HOA dues that may cover some exterior work.
A few things to check before renting one out:
- HOA rental rules, such as minimum lease terms or caps on rented units
- What the HOA maintains and what you maintain, especially roof and exterior
- Noise and shared wall issues, which the lease and house rules can address
- Parking rules for tenants and guests
Example
A hypothetical three bedroom townhouse rents for $2,450 a month. Fixed costs are a $1,500 mortgage payment, $250 in property taxes, $85 in insurance and $180 in HOA dues that cover landscaping and snow removal. That leaves $435 before repairs and vacancy, and the owner sets aside part of it for the roof, which this HOA does not cover.
Why it matters for landlords
Townhouses can be steady rentals, but the HOA and ownership form shape your costs and rules. Read the documents before you buy and budget for whatever the association does not cover. In TenantLoop, HOA dues can be recorded as a recurring expense on the property, and tenants send repair requests from the portal like any other unit.
Related terms
In practice. How the term shows up day to day.
Is a townhouse the same as a townhome?
Yes. Townhouse and townhome are used interchangeably in most of the United States.
Do townhouses always have an HOA?
Most newer townhouse communities do, to maintain shared grounds and set exterior standards. Older row houses in cities often have no HOA at all.
What is the difference between a townhouse and a row house?
Very little. Row house usually refers to older attached homes in a continuous line on a city street, such as a brownstone. Townhouse is the more common term for newer attached homes.