When deciding what type of home to build for a rental property, you have several choices you can make. The most common piece of residential real estate is a single family home but there are other possibilities available for your consideration and one of those choices is a townhome.


The concept of a townhome has been around for quite some time and is a popular choice for homeowners but sometimes the definition of a townhome is not all that clear. What is a townhome and what are the advantages of owing one?

A townhome is a home that shares walls with other units, much like a condominium project. Carrying a smaller footprint and more than one story, townhomes can be part of most any size project. A townhome may be part of a four unit project on up to dozens. If you think of an apartment building where the tenants live in a two or three story apartment, then you have a picture of what a townhome looks like. A townhome is part of a homeowner’s association, again like a condominium project yet unlike a condominium a both the unit and the lot it occupies are properties of the owner. In a condo, the land and common areas are owned equally by the condominium owners.

If you’re building a townhome you’re building the entire project, not just one unit and each home can be sold or rented individually. Townhomes can be less expensive compared to a single family home of similar size and can provide its tenants with additional amenities such as a swimming pool, club house and workout facilities. Because townhomes are part of a much larger project to build, it’s more likely you’ll be an investor who participates in the new construction in lieu of financing the entire project on your own.