Many people would consider investing in townhouses as an attractive proposition. Yes, a townhouse is a great real estate investment option for a number of reasons. But, are you ready for this kind of investment? Here’s what you need to know about this type of real estate and why a townhouse is the best property to invest in right now.
A Great Investment Option
Aside from a bigger living space, a townhouse can also be considered as a source of potential passive income. You are in luck if the value increases over time. This investment may be one of your strategies to begin building your wealth. Selling townhouses for a profit is common because you will never run short of buyers.
Location, Location, Location
Typically, townhouses are in the most conveniently located sites. Public amenities like schools, shopping centers, hospitals, public parks, business area, etc. are accessible to townhouse owners. It is also common among townhouse complexes to have mutual facilities such as swimming pools, gyms, and laundry facilities. Plus, having other residents sharing the upkeep of the common facilities eases the burden of paying for such obligations alone. Convenience, therefore, is the top-most reason why a townhouse is such an attractive investment option.
From the market price alone, one can definitely say that it is more affordable to buy a townhouse than a detached property. The reason is that a townhouse has a smaller lot size. Because they are smaller than detached homes and are clustered together, townhouses are designed to have a cost-efficient heating/cooling system. The facilities are also shared so maintenance costs are lower. So, if you have a limited budget, then a townhouse could work out for you.
Now that you know what advantages townhouses offer, it’s time to learn how you can fully benefit from such an investment. Here are some tips from an experienced realtor:
Pay with Cash
Do not borrow money to buy an investment property. You should at least be able to afford the mortgage without depending on rental income. The monthly mortgage may end up as a financial burden if you get a high turnover and can’t afford to pay your dues. This can be a huge problem in the future if you end up damaging your credit.
Do Your Research
If you are planning to purchase a townhouse as a potential investment to sell later, research it thoroughly. Find out if there are planned developments in the area that can affect the property value. Examples of developments are new roads and establishments. If the area is up-and-coming then you might have a gem in your hands.
Plan Out the Expenses
Buying a townhouse can be costly. There are taxes, utilities, unexpected repairs, and upkeep to pay. You also need to oversee the property for maintenance needs. There is an option, though, to have an agency handle rent collection and other things. It will ease some of the burdens but this can cost you something too.
In conclusion, a significant amount of money must be put up front to begin investing in a townhouse. It can be expensive to buy real estate. Not to mention about maintenance costs, and potential income gaps. These are the things you have to consider along with other factors related to real estate investments.