If you have rentals in Salt Lake County you may have received a letter from the Salt Lake County Assessor's Office like the one below. Several clients contact us concerned that their taxes will be
Is Buying A Townhome A Good Idea
The number of Utah residents purchasing townhomes in Utah is on the rise and more people are choosing that option than ever before!
The home prices in Utah have been increasing greatly over the past several years which is making affording a decent single family home challenging for many home buyers. Often I have been housing hunting with clients for a single family home with a budget under 300K and sometimes it becomes clear in the area they prefer they could get a brand new townhome in excellent condition for that price or a single family home needing a ton of work and updates for the same price. For many people they decide it is worth giving up some privacy and a large yard, for a beautiful, updated townhome that is move-in ready. There are advantages and disadvantages to a townhome and it really depends on what is important to you and your lifestyle.
Often I find buyers are turned off by HOA fees and they feel they are too expensive for what they pay for. However, it is important to look at what is in included in the HOA fee before you make any assumptions. For example, I was discussing the option of purchasing a townhome with a client last week and the HOA fee was $175.00 per month. She was horrified and said that she would not consider that high of a monthly fee. We then discussed what was included in this HOA fee and we found that the fee included water, sewer, trash and internet service. We then discussed the cost of yard care on a single family home such as sprinkler maintenance, water for the lawn, fertilizer treatments etc. and the other maintenance costs associated with a single family home. It became apparent that she would likely be saving money per month without those additional expenses and utilities. Another thing to keep in mind is that a townhome HOA fee will always include exterior insurance of the home (the HOA must be sure everyone is covered, so it is included in the monthly fee.) This will also reduce the cost of homeowner insurance. Although there are some drawbacks with HOA's there are some positive aspects as well. Often the monthly fees will even go towards amenities that you can enjoy in your community (pool, fitness area, parks etc.) and you have assurance that your neighbor won't have 5 foot high weeds growing in their yard or an old bus and 14 tires sitting on the side of their house. The negative aspects of an HOA is you are not allowed to do anything you want to your property and will have specific rules to follow ( as well as limited parking for guests.)
One negative aspect of HOA fees is there is no guarantee they will stay the same and over time will likely go up. It is important when you do buy a townhome that you take into account the age of the townhomes and the condition of everything and what is covered. Last week I went to check out some townhomes in Provo that were built in the 70's and noticed that the roof was made of wood shingles and most of them were rotting/moldy and splitting. Those roofs can last 50 years, but when the time is up to replace them it will be a huge project to tear off and replace it and it is likely that there will soon be an assessment to split the replacement costs between the homeowners to pay for it. In a case like this, it is important that your Real Estate Agent checks on the budget and financials of the HOA and for them to ask if there are enough funds saved to cover the needed project. If you do buy a townhome, just be sure it is in good repair and conduct a thorough inspection of the property. You also want to be sure your agent is thorough and checks the HOA information as well as ensure there is no litigation currently on the property that can't be easily resolved. If you are thorough in doing your due diligence on the property, everything should be good.
In summary, having privacy, more space, a spacious garage and large back yard are important to many buyers. However, sometimes if these things don't seem realistic with today's home prices a townhome can still be a great purchase and have many benefits for buyers. Plus...think of all of the extra time you will have not doing yard work over the weekend!