Many new Oregon real estate investors look at townhomes as an attractive investment. Due to their nearly maintenance-free environment, abundance of community amenities and almost guaranteed appreciation value, it may be hard for you to say no to this type of investment. However, it’s important to read through the various pitfalls of investing in a townhome.
Real estate investors who decide to purchase townhomes will find out quickly that HOA fees can be expensive. Due to the vast spectrum of amenities that many of these townhome complexes offer, HOA fees are there to help foot the bill. While you may be able to pick up the townhome for an attractive price, you need to factor in the overall annual HOA fees. You’ll might find out that these fees make the townhome sale price no longer attractive.
Renters who value a good deal above their own privacy will spend their money on a cheaper apartment rental. Those who are more concerned about privacy are more willing to pay extra money to get it. Unfortunately, townhomes don’t offer a lot of privacy, but the rental rate tends to be higher than most apartments. You may find it more difficult to locate tenants who are okay with a decreased level of privacy that townhome real estate offers as compared to a single-family home.
Investing in a townhouse may seem attractive at first due to its lower cost, but looking closer at the deal could reveal some negative features like high HOA fees and a lack of overall privacy at the property. It’s always important for an investor to weigh the pros and cons of any investment before deciding to put money on the closing table.