How to Invest in a Townhouse

Townhouses are single or multi-storied dwellings with a common wall connecting to another townhouse. You own both the dwelling and the piece of land it sits on. Usually you own a little green space like a small lawn, patio or balcony. If you want high returns, low risk and limited effort, then maybe a townhouse is in your future.

Instructions

Difficulty: Moderate

1. Calculate the monthly expense you can afford, including any community dues. Check into how much the total monthly utility bills will be.
2. Work with a realtor who can help you search lots of available properties and can get you in to look at them.
3. Choose a good location. For the highest return, the townhouse should be convenient to something like employers or schools.
4. Choose the townhouse. Consider the unit size, storage capacity, natural light and views. Also look at the recreational areas and laundry facilities.
5. Check with the current owner or Management Company about the property, including questions about any problems. Order a home inspection.
6. Consider the Homeowners Association. Know what amount of money they keep in reserve for unexpected repairs or improvements. Know what the dues are, when and how often they increase.
7. Get a disclosure statement from the seller, who should reveal serious defects or be liable for that omission.

Tips & Warnings

• In traditional fixed rate mortgages, the interest rates lock, making them the safest choice for most buyers.
• Be sure to review all the restrictions imposed on residents of your townhome community. This is especially important if you want to be able to rent your townhome to others.