Sense & Centsibility Blog

Making the Decision to Purchase a Home: Townhouses vs. Single Family Homes

House keys

Deciding to purchase a home is probably one of the biggest financial decisions you make. Not only must the home be affordable, there is a lengthy process involved. On top of the home buying process, some home buyers are overwhelmed with the options of homes. Home buyers deciding between a town home or single family home is a very common topic and worth a discussion to know all your options!

What is a town home?

Typically units are attached to each other and share at least one common wall. There are detached town homes as well, although they usually do share a wall .

What is a single-family home?

A stand-alone house that is free standing dwelling, on land that you own.

Townhomes VS Single Family Homes

Before buying a home, consider the advantages and disadvantages to both types of homes. To highlight the biggest difference between a town-home and a single-family home would be the HOA (Home Owners Association) monthly fees. HOA monthly fees vary depending on the town home amenities. Typically, the lawn is groomed every week, and the moment it starts to snow, shoveling and plowing are taken care of. If there is a pool, it is cleaned daily. For a young professional, senior or a busy young family, these can be extremely helpful. If you are looking for convenience, a town home may be what you're looking for. Single-family homes do not have HOA fees, but you are responsible for all external maintenance.

Another big difference would be privacy. Townhomes share at least one common wall. It's fair to ask your realtor or seller about noise factors and the year it was built. Single-family homes have larger square footage, larger yards, room to grow/home additions and its 100% owned by the homebuyer. Every HOA is different; inquire about all the details.

As long as you make an informed buying decision, both are great options, it just depends on what which home fits your needs.

Additional Comparisons


Single Family Home

Monthly HOA fees; which increase over time

No HOA fees

Need HOA permission/approval for exterior changes No permission needed for exterior upgrades or changes
HOA rules and guidelines

No rules or guidelines

HOA may have pets restrictions

Pets are regulated by city ordinance only

HOA fees often cover exterior maintenance, law care, shoveling, and landscaping You must take care of exterior maintenance, law care, shoveling and landscaping
HOA might include amenities: pool,no water utility bills

You only have what you purchased

Home owners insurance is less, because structure insurance is included in the HOA fee

Home owner insurance more expensive

Townhomes share at least one common wall with neighbors

More privacy from neighbors

All the townhomes look the same

Opportunity to own a unique looking home

After mortgage is paid off, you own your unit, but not the land After mortgage is paid off, you own home/land 100%
Less square footage of property

More varied square footage options

Great starter home – affordability

Room to grow/additions

*Since Townhome HOAs can vary greatly from place to place, it’s important to understand what you’re responsible for and what’s covered in your Townhome’s HOA fees. Amenities can vary, so be certain you understand all aspects of the HOA before making an offer.

Consider Finances

It’s also important to consider affordability when considering a major purchase like a home. The Consumer Financial Protection Bureau recommends a total debt-to-income ratio of 43%. To calculate this you divide all your monthly debts by your gross monthly income the result should be at or lower than 43%.

If you’re looking to purchase a home in the future, schedule a meeting with a certified housing counselor with LSS Financial Counseling. We work with Minnesota home buyers long term to get financially ready and informed about resources and options before purchasing a home. Call 888.577.2227 to schedule your free appointment today or visit our website for more information.

This blog was written by LSS Financial Counselor Mei Lin Kroll.