In today’s market more than ever buyers are pursuing stacked townhomes as a legitimate option for their home ownership needs. As a result the prudent and intelligent buyer, whether of the end-user variety or an investor looking for cash flow, has to assess the pros and cons of stacked townhomes.
Pro Number One: Stacked townhomes present themselves to be the most affordable options. Let us quickly take a look at the numbers. In 2021 a total of 11,500 condo townhomes sold. Of those 11,550 a total of 2,090 were stacked townhomes. The average price of the townhomes that were not stacked was $857,570. Now what was the average price of the stacked townhomes? The answer to that may surprise you; $700,584!
Pro Number Two: Low maintenance! That is right, stacked townhomes have lower maintenance fees associated with them when compared to any other type of condominium townhome. Not only does this characteristic further illustrate the affordability point, this is equally as important for investors as well. When making an investment, one typically looks to minimize carrying costs as much as possible. Whether you are starting out on your home ownership journey or looking to invest in real estate; lower fees make stacked townhomes very attractive.
Pro Number Three: This one is very key for our investor friends out there; stacked townhomes have decent to great cash flow. For the purposes of this analysis, we can equate cash flow to rental income. What makes condo townhomes pretty good cash flow options? Well in short, for the lower purchasing price as established by Pro Number One, and in conjunction with the lower costs as established by Pro Number two, we can confidently say that the relative rental income derived from stacked townhomes make it the superior option over alternative property types in the same price range!
Con Number One: You may have noticed mentions of ‘fee’ or ‘maintenance’ – well that is not a mistake; Stacked Townhomes are mostly, but not always, condominiums in nature. This is by no means a deal breaker, however freehold is generally preferred in real estate ownership.
Con Number Two: Noise levels! Due to how stacked townhomes are constructed, not only can you have neighbors to your left and right as typical with townhomes BUT, you may always have neighbors below or above you. Thus as a result, stacked townhomes run the risk of being highly congested and the level of noise insulation may not be sufficient to protect you from hearing your neighbors.
Con Number Three: Stacked townhomes often do not appreciate as much as freehold townhomes or other types of condo townhomes. Although a prudent buyer stands to make gains from a purchase of a stacked townhouse, put simply; the best stacked townhouse will not appreciate as much as the best freehold townhouse.
