Can’t Afford a Toronto House? Consider Buying a Townhouse

If you’ve grown tired of bidding wars on second-rate houses, it’s time to consider the townhouse. Here are 14 things you need to know about buying a townhouse in Toronto:

1. There are 2 kinds of townhouses: freehold townhouses and condo townhouses. Condo townhouses are operated in much the same way as condominiums, in fact they are a type of condominium. There’s a board of directors and a condo corporation, owners own a percentage of the corporation vs actual land, there are monthly maintenance fees (part of which goes towards a reserve fund to deal with building maintenance and future repairs) and owners generally only own and are responsible for maintaining the inside of the unit (technically, the drywall and everything inside). When you own a freehold townhouse, the legal and financial structure is the same as owning a regular single residential home – you own the land, you’re responsible for the roof, the windows, the electrical, the plumbing, etc. You generally don’t pay monthly maintenance fees (though sometimes owners pool together and pay for snow removal or landscaping).

2. It’s cheaper to buy a townhouse than a house and making that tradeoff can get you into some of Toronto’s best downtown neighbourhoods that you might not otherwise be able to afford.  Every homebuyer needs to weigh the pros and cons of lifestyle vs commuting vs the amount of space vs neighbourhood vs the ‘burbs vs your budget

3. You may want to get a home inspection. Despite our oft-repeated advice that a condo inspection might be a waste of money, [Related: Do I Need a Condo Inspection?] if you’re buying a condo-townhouse, you may very well want to get a home inspection. Depending on the townhouse complex that you buy into, you may actually own the furnace, air conditioning system and some of the other main systems and it’s important to know the condition they’re in before you buy. If you’re buying a freehold townhouse, you’ll want to get a home inspection just as you would for a single residential home. [Related: Top 10 Things to Know about Home Inspections]

4. For condo-townhouses, maintenance fees are usually significantly lower than in condos. That’s because you aren’t paying for concierge services, a fancy lobby or a pool.

• Condo townhouse maintenance fees in Toronto usually range between $0.20 and $0.40 cents per square foot
• Condo maintenance fees are usually in the $0.55-0.80 cents per square foot

While that may not sound like much, that could easily equal $300-400 a month, which could finance $80,000-$100,000 of the mortgage at today’s rates.

I like to think of maintenance fees as a forced savings plan for when something goes wrong. Usually, the roof, windows, plumbing and electrical is owned by the condo corporation, meaning if something needs fixing, the condo corp is responsible for it. Don’t fool yourself into thinking it’s ever cheaper to maintain a house than pay condo fees.

5. You can still get a townhouse with amenities if that’s your thing. Many of Toronto’s townhouses share facilities with condos so you can still access a gym, party room or pool. Of course, maintenance fees will go up correspondingly to help pay for those facilities. 

6. It’s easier to maintain a condo-townhouse than a house. If you aren’t especially handy, you’ll appreciate being able to call the townhouse’s property manager to deal with flooding, plumbing, roofing or electrical issues. Many townhouses also organize annual maintenance items like changing furnace filters and snow removal too. Freehold townhouse owners, unfortunately, have the same house maintenance issues as single residential house owners do (but at least you can commiserate with your neighbours).

7. Most townhouses have great private outdoor space, from big terraces to rooftop gardens. It’s the best of both worlds really – you can plant an urban container garden without the hassles of mowing the lawn and endlessly weeding.

8. Host a BBQ – it’s not against the rules. BBQ’ing in most condos is strictly against the rules because it’s illegal to transport a propane tank in an elevator. While some of the newer condos have built-in gas lines which allow for BBQ-ing, almost all townhouse complexes allow BBQ’s.

9. Love thy neighbour. Townhouses are usually sandwiched in between two other townhouses (and stacked townhouses actually have a neighbour above or below too). Sound transfer between townhouses varies considerably in Toronto so do your homework and hope for good neighbours.

10. Much of Toronto’s housing stock is around 100 years old, but new townhouses are being built every day. That means fewer funhouse walls, slanty stairwells and termite issues. Of course, that also means that townhouses have less character and uniqueness than Toronto’s old houses, but most have newer finishes and good heating and A/C. [Related: 10 Things to Know About Old Toronto Houses]

11. Stairs, stairs and more stairs. Many of Toronto’s townhouses have a lot of stairs and it’s not unusual for them to have an outdoor walk-up and be 3 or 4 storeys tall. These townhouses are not ideal for toddlers or those of us with bad knees (but all those levels are great for escaping your spouse). Pro tip: there are some great townhouses in Toronto that aren’t all stairs!

12. Historically, townhouses have appreciated faster than condos (though appreciation on houses has been faster and higher). Sure, your home is where you hang your hat – but if you play your cards right, it should be an investment too.

13. Bidding wars for townhouses aren’t nearly as crazy as they are for townhouses. We’ve found ourselves in more than a few bidding wars for townhouses this year, but the discrepancy between supply and demand isn’t as large as it is for houses, so prices don’t go as crazy. There are also great comparable sales (in other words, nearly identical or similar homes have sold) that helps cap how high people bid for a townhouse.

Intrigued? If you’re thinking of buying a townhouse in Toronto, give us a shout – we know all the good townhouse complexes (and the bad ones too). We can send you townhome listings too!