Buy a Townhouse or Rent?

[yam102284]

I need some advice. We're looking at buying a house or a townhouse. We went through our finances and figured out what we could afford for a mortgage payment and all that stuff. We could afford a house, but that would just about max us out with money every month, and I would rather live comfortably with money for emergencies and things, then not saving.

So we decided we might be better with a townhouse. We know there would be association fees, but there are some townhouses in the area that are much less than a house - like $20,000-25,000 less.

Would it be worth it to buy a townhouse or to continue renting? We would be in the house for at least three years, until FH finishes school. I've done so much research and have heard different opinions on both sides, but wanted to see what you ladies think :)

[WBandMe]

Well, we opted not to buy right now for the same reason you're considering--we want to have a cushion. So, we're renting a townhouse and we love it. We don't directly pay the association fees or anything so I don't know how much that is, but as for living in a townhouse versus a house, for us it pretty much is like we're in our own house. I mean, we don't have a yard or anything, but inside the house we never hear our neighbors or anything like that that you might run into with say an apartment. But, I personally wouldn't want to BUY a townhouse, which is why we're renting until we're better able to buy a house. Long-term I want to have a nice yard for pets or kids, be able to have a little more freedom to have outdoor parties/BBQs, etc. Also, while we have a garage and a driveway big enough for one car, anything else is in shared parking and there's not a guarantee there will be anything, so if we wanted to have people over some of them might have to park pretty far away. So my personal opinion is the townhouse is nice for renting, but if you're looking to buy you might be best off waiting until you can get a house. That's just me though.

[yam102284]

Well, we opted not to buy right now for the same reason you're considering--we want to have a cushion. So, we're renting a townhouse and we love it. We don't directly pay the association fees or anything so I don't know how much that is, but as for living in a townhouse versus a house, for us it pretty much is like we're in our own house. I mean, we don't have a yard or anything, but inside the house we never hear our neighbors or anything like that that you might run into with say an apartment. But, I personally wouldn't want to BUY a townhouse, which is why we're renting until we're better able to buy a house. Long-term I want to have a nice yard for pets or kids, be able to have a little more freedom to have outdoor parties/BBQs, etc. Also, while we have a garage and a driveway big enough for one car, anything else is in shared parking and there's not a guarantee there will be anything, so if we wanted to have people over some of them might have to park pretty far away. So my personal opinion is the townhouse is nice for renting, but if you're looking to buy you might be best off waiting until you can get a house. That's just me though.

Thank you for your advice! :)

We've been renting for almost 3 years already, and we'll be in this area for another 3 years at least. If we were to buy a townhouse, we'd be buying an end unit. One, because it gives more appeal when trying to sell it, and two, because we're already in an end unit in the apartment complex we live in, so we're already used to it. I just feel like we're throwing our money away, and would want something, that when we're ready to sell, can make a little money back on, or break even.

I guess I just keep going back and forth on what to do. We're still looking around at houses, and will even take a look at a few townhouses as well. I guess time will tell.

[SkippyNXC]

the one point that i'd throw into the mix is that when u buy a townhouse (especially in the down market) even if u can't SELL it when ur ready... u can rent it out til the market turns n maybe even make a lil profit off of it ;)

that's FH n I's plan for next year if we cannot afford to buy a house

[yam102284]

the one point that i'd throw into the mix is that when u buy a townhouse (especially in the down market) even if u can't SELL it when ur ready... u can rent it out til the market turns n maybe even make a lil profit off of it ;)

that's FH n I's plan for next year if we cannot afford to buy a house

yeah that's what i keep saying. we'd be in there for at least three years, so the market should be (hopefully) somewhat near normal again. i think we're definitely going to keep looking, and throw townhouses into the mix. there's a few that i like, that are a good price.

[wannabeNurse2]

I have found many townhouses in the area I plan to move to that have big yards, two car garages, and a big driveway just for one townhouse not a bunch. It just depends on where you live as to what is available. There are pros and cons to renting a townhouse. You are going to pay more to rent a townhouse than if you bought one. The landlord has to make a profit somehow. One plus side to renting is if something breaks the landlord is responsible for it. One con is you can't paint or change the townhouse in anyway without the landlord's approval. You can have the same issue if you buy a townhouse though.
I've heard horror stories about repairs on townhouses. There was a story in the paper about two townhouse owners taking the third townhouse owner to court for not paying his part of the roofing cost. The owners had put up with their roofs leaking for two years, because the third owner thought the estimate for the roof was too high so he refused to pay. According to community rules each owner had to agree on the color, the company that was to replace the roof, and the cost of replacing the roof. Each owner had to pay for part of the cost of the roof being replaced. The other two owners finally got the community committee to agree to let them get the roof repairs done without the third owner's approval. Then they just sued the third owner for his part of the repair costs. Another thing is having to meet with a committee to ask if you can change the siding on your townhouse. One community only allowed tan, beige, and white siding from a specific company. I don't know about you, but if I pay that much for a property I want to be able to do whatever I want to it! And yes I know historical communities can be the same way. Anyway, just some things to ask about if you do decide to buy a townhouse. As for me, I decided to rent until we want to buy a house.

[MrsDM]

I couldn't tell you a thing about renting, but I can tell you why we opted for buying versus renting.

FH and I bought (well, the condo was only in his name), a condo when we moved out of our parent's house. We didn't want to throw our money away into rent. 2 years later (actually March), when we sold the condo and bought a house and we broke even on the condo. So basically, we lived free for 2 years.

Also, in three years, the housing market should hopefully bounce back a bit, so you can use some of that money you have invested in your townhouse, as a downpayment to your house.

Good luck!

[firespirit]

Three years is really not a very long time for planning to own a house. It also depends on how much you are putting down, if you'll have to pay PMI.

Plus renting a place out is not quite as easy as people think. I tried to do that when I moved for a job and was not able to sell or rent. I ended up having to give it back to the bank.

Plus you'll want to look at the tenant's rights for where you live. In Washington it can take a minimum on 3 months to evict a tenant and a lot of expense.

[wannabeNurse2]

My sister is renting out her house that she had bought in a different state. She has had some renters from hell! One couple didn't pay her for three months, lied about when they moved out, left the house filthy, and they took all of my sister's brand new stainless steel appliances with them when they moved out. Of course my sister took them to court and their wages are now being garnished until she is paid in full for the damages. My sister's other rental sat vacant for months at the same time so she was paying three mortgages every month! So like pp said renting a property you can't sell isn't so great.

[Danielle9608]

I would like to throw in my 2 cents here. Because I really wish I heard this from someone 3 years ago. Almost 3 years ago I made this same exact choice you are thinking about. I currently am living in a townhouse right now and HATE IT! Our plan was to be there 3 years tops and then move into a single family house (this is when the market was good). Well now three years later and even after thousands in upgrades our townhouse isn't even worth what we owe on it. The market here is MA suck$. And the worse part is if we waited we would be in a larger single family home for less then we are paying now.

Okay but this is just my situation, not saying this will happen to you but just know that it could.

When you are looking to buy a townhouse get to know the neighborhood ask about the neighbors and association because these things can make for a great experience or an awful one living in a townhouse.

Also keep in mind when living in a townhouse there is a LOT of CAN'T DOS. For example: Flags, yard signs, even welcome mats sometimes have to been approved by the association. Most times any changes to the outside of you house must be approved. I have been asking my association to remove a over grown dead bush from the front of my house for 2 years.

Also research what is common condo fee near you and what it covers. $250-300 is pretty common by me. But now the association is talking about doing a assessment for new siding. This is going to cost each unit owner 5000K. To be paid either in full or raising the condo fee to cover the cost.

Anyways I could probably give you a 100 more reason NOT to buy a townhouse but like I said I am dealing with bad neighbors, bad association (also BAD management company that the association uses to run the place), and a bad market. This doesn't happen to everyone.


Good luck, hoped this helped a little.

[yam102284]

Three years is really not a very long time for planning to own a house. It also depends on how much you are putting down, if you'll have to pay PMI.

Plus renting a place out is not quite as easy as people think. I tried to do that when I moved for a job and was not able to sell or rent. I ended up having to give it back to the bank.

Plus you'll want to look at the tenant's rights for where you live. In Washington it can take a minimum on 3 months to evict a tenant and a lot of expense.

I know 3 years isn't a long time for owning a house, but I'd rather be in a house and get money back (hopefully) when we sell it, then live in an apartment for a total of 6 years. I want to stay in this area, and we will if he finds a job, we just don't know if he will find a job here.

I wouldn't be renting it out if I couldn't sell it either. We'd be staying put in it, until he finds a job.


Thank you everyone for all your advice. We have a lot to think about, and I'll definitely be talking to FH tonight.

[firespirit]

I know 3 years isn't a long time for owning a house, but I'd rather be in a house and get money back (hopefully) when we sell it, then live in an apartment for a total of 6 years. I want to stay in this area, and we will if he finds a job, we just don't know if he will find a job here.

I wouldn't be renting it out if I couldn't sell it either. We'd be staying put in it, until he finds a job.


Thank you everyone for all your advice. We have a lot to think about, and I'll definitely be talking to FH tonight.

I've thought of it that way too. But, I've also calculated how much my husband has spent on his house and he has owned it for 6 years now.

We are selling his house right now for 40,000 more than he paid for it 6 years ago (because the bubble burst and we are back to 2005 prices so we calculated what we put into it and tried to price it at an appropriate 2005 price). Now, almost all of that 40,000 goes to real estate commision.

So with interest, taxes, real estate commision, repairs, upgrades, house insurance etc. Things that don't normally come with an apartment. It has cost us over $2000 a month to live there for the past 6 years. (Plus an extra $500 a month in dock rent because it's a floating home, but that's an entirely different situation.)

So it's pretty much a wash, because we got to live in a floating home for six years at $2500 a month and it is in a great location. We got to live in a great place to live, but honestly we didn't get any money back, it went to the bank, repairmen, real estate agents, etc. instead of a landlord. The one advantage was the tax break, but it really doesn't make up for all the money we gave away to other people too.

I just want to try to paint the whole picture, because lots of people think why throw my money away on rent when I can buy and make some of that back? But when you really add it all up, unless you buy the house without a loan, you are still throwing money away, it's just to someone else.


ETA: On the plus side interest rates are really low right now. It just all depends, as a long term investment there really is money to be saved on owning a house. The problem is short term it doesn't necessarily make sense.

[wannabeNurse2]

Just one more tid bit. I wouldn't be putting down roots until your husband does find a job. You never know where or if he'll find a job.

[yam102284]

Just one more tid bit. I wouldn't be putting down roots until your husband does find a job. You never know where or if he'll find a job.

Well, he does have a job now. He's had a full time job with the same company for the past 8 years or so. He's just now going back to school for what he truly wants to do with his life. So he does have a job, he's just going to be going to school as well. I want to stay here, I love it in this area. And we will if he finds a job. It's just not every day you see ads for funeral directors. At least not around here anyways.