Investing in real estate can be a lucrative venture. However, investors should carefully evaluate their goals, risk tolerance, and management preferences before choosing the property type.

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In the Greater Washington D.C. and Baltimore areas, there are many options available, row houses, duplexes, and townhouses stand out as attractive choices for investors looking for stable returns. 

In this HomeBuyer Brokerage overview, we will look at the distinctive features of each property type, weighing the pros and cons to help investors make an informed decision. 

In addition, investors should understand the impact of Homeowners Associations (HOAs) and Condo Associations on their investment, as these associations have restrictions and monthly costs.

Row Houses

Row houses, often found in Washington D.C. and Baltimore city, share common walls with neighboring properties and are known for their uniform appearance. Investing in row houses can be advantageous since they are often significantly less expensive than single-family homes. Moreover, they often appeal to renters seeking a balance between individual living space and community connectivity.

One of the main benefits of row houses for investors is the potential for higher rental yields. With several units in close proximity, property management becomes more streamlined, and economies of scale can be achieved. However, it's crucial for investors to consider the potential challenges, such as maintenance on the property and potential noise disturbances from neighboring units.

Duplexes

Duplexes, or two-unit buildings, offer a middle ground between a single-family home and a row house. Duplexes, like single family homes, often have front and back yards which gives a renter the opportunity to garden and enjoy outdoor space. Sometimes an investor will purchase a duplex, live in one unit while renting out the other providing a steady stream of income.

Investing in a duplex could make for easier property management in that tenants may sign longer leases and want more control over the property. Again each situation will be unique so investors need to have a simple yet effective way of vetting potential renters. 

Townhouses

Townhouses combine the benefits of both row houses and duplexes, offering individual units with shared walls in a planned community setting. Townhouse developments often feature communal amenities and green spaces, making them attractive to renters who want a sense of community.

Investors in townhouses benefit from the community environment but often need to agree with the rules and regulations of an homeowners association and/or condo association. Both of these associations have monthly and/or yearly fees that the investor owner would be responsible for paying. It's essential for investors to carefully review HOA agreements to ensure they align with their investment goals.

Homeowners Associations (HOAs) and Condo Associations:

One crucial aspect for investors to consider when purchasing row houses, duplexes, or townhouses is the presence of Homeowners Associations (HOAs) or Condo Associations. These organizations play a big role in maintaining the community, enforcing rules and regulations, and managing common areas.

While HOAs and Condo Associations contribute to a well-maintained and aesthetically pleasing environment, investors must carefully review the association's bylaws and regulations. These documents outline restrictions on property modifications, rental policies, and other crucial factors that can impact an investor's ability to manage and profit from the property.

Monthly Costs and Assessments

Investors should also factor in the monthly costs associated with HOAs and Condo Associations when considering row houses, duplexes, or townhouses. These costs typically cover shared expenses such as landscaping, exterior maintenance, and amenities like swimming pools or gyms.

Monthly assessments can vary widely, and investors need to assess whether the fees are justified by the services provided. A well-managed association contributes to the property's long-term value, but excessive fees could negatively impact the property's cash flow.

Comparing Investment Potential

When deciding on the best investment property among row houses, duplexes, and townhouses, several factors should be considered:

• Rental Income Potential:

• Duplexes often offer dual rental income streams, making them appealing to investors looking for consistent cash flow.
• Row houses and townhouses can also provide reliable rental income, especially in desirable locations or neighborhoods.

• Appreciation:

• All three housing types can appreciate in value over time. However, the rate of appreciation may vary based on the local real estate market and neighborhood dynamics.

• Property Management:

• Duplexes may require less intensive property management compared to a row house or townhouse. With two units under one roof, investors can efficiently oversee maintenance and tenant relations.

• Long Term Goals:

• Row houses in the city may not attract renters who want long leases. This ultimately leads to more work for the investor as there are costs to marketing the property and finding good tenants. Duplexes and larger townhouses may attract renters who want to be part of a community. Schools and outdoor space may be a factor which would attract renters who want longer leases. 

The bottom line

Real estate investment, row houses, duplexes, and townhouses offer advantages and risks. . Investors should carefully evaluate their investment goals, risk tolerance, and management preferences before choosing a property type. 

And most importantly, investors buying a property in an HOA or condo association should thoroughly review regulations and monthly costs so they make an informed decision. 

Your long term investment goals should be clear from the beginning and include a solid understanding of the real estate market where you want to purchase your property. 

How can we help?

The exclusive buyer agents at HomeBuyer Brokerage specialize in serving home buyers. Please reach out with questions at info@homebuyerbrokerage.com.