If you’re on the hunt for a new home in Canada, a freehold townhouse might be the perfect option for you and your family. A freehold townhouse is a particularly great option for first-time homebuyers. It offers many of the benefits of owning a single-detached house (without the oppressive price tag) while also providing some of the perks of condo living and healthy property-appreciation rates. If you’re considering buying a freehold townhouse in the Ontario real estate market or any other province, here’s what you need to know about this popular property type.
Freehold Townhome: A Definition
A freehold townhouse is a type of attached dwelling that you own outright. When you purchase a freehold townhouse, you become the proprietor of the land that your townhouse sits on – both interior and exterior, as opposed to condo townhouses, in which you own the unit but not the outside and common areas.
In that sense, owning a freehold townhouse is similar to owning a stand-alone house; you are responsible for its upkeep and repairs and are also entitled to any increase in its value. Freehold townhouses are particularly popular in urban areas, where they offer the privacy and security of a single-family home without the maintenance fees associated with condo ownership.
Pros & Cons Of The Freehold Townhome
Ready to discover if a freehold townhome is for you? Check out the pros and pros of owning this type of property below:
Pros Of The Freehold Townhome
No Monthly Maintenance Fees
If you purchase a freehold townhome, there are no condo complex management or HOA monthly fees to take care of things; the responsibility falls entirely on you. You can save money to pay for future expenses like roofing repairs instead of using that extra cash to fund a condo reserve.
Lower Prices Than A Single-Family Home
Freehold row homes are typically more affordable than single-family detached homes in Canada. According to WOWA’s housing market report for 2022, a separate house for sale in Toronto costs an average of $1.3M, while freehold townhomes have an average price of $990K.
A Freehold Townhome Appreciates Fast
Freehold townhouses typically appreciate faster and at a higher rate than other residential properties, making them a wise investment for those looking to build equity. This is because freehold row homes don’t have condo fees, and they are more in demand among entry-level buyers.
You Are In Control Of Your Property
When you purchase a freehold townhouse in Canada, you have complete freedom to make the space your own. You can renovate, decorate, or make any changes you see fit to the inside and outside of your home. You don’t have to worry about adhering to any set of guidelines or seeking permission from anyone.
More Family-Friendly Than A Condo
Most freehold townhouses available for sale in the GTA are situated in family-friendly neighbourhoods. In contrast, condominiums or condo townhomes tend to be located in areas with more traffic and aren’t as ideal for letting kids play outside or take a relaxing evening stroll.
You Get To Have Some Outdoor Space
If you purchase a freehold townhouse, you’ll get your own backyard – perfect for relaxing in your very own green space and even having a pet. You can style your backyard however you want, so if gardening is your thing, go all out instead of sticking to a few plants on a balcony.
Cons Of The Freehold Townhome
No Maintenance Fees
This is both an upside and a downside of buying a freehold townhome. In contrast to a condo building or complex, there is no management staff to take care of upkeep which, in turn, means it becomes the responsibility of the owners. While saving money is always fantastic, you also run the risk of having neighbours who neglect this if you purchase in the lower price ranges.
You’ll Handle All Maintenance And Repairs
As the owner of a freehold townhouse, you’ll be responsible for all maintenance and repairs. This includes everything from mowing the lawn to fixing the roof, so if you’re not handy or don’t have the time to do repairs yourself, it’s essential to factor in the cost of hiring someone to do them for you consistently.
Less Private Than A Detached Home
There’s no denying that detached homes are more peaceful since you have more space on either side separating you from your neighbours. No townhouse can provide this, so get ready to occasionally hear things happening in the neighbouring unit or be annoyed by your neighbours’ guests parking in front of your driveway.
There May Be Disruptive Renters
Freehold townhomes are popular among renters because countless investors are interested in this type of property. Therefore, you may have to deal with noise late at night, trash left in the yard, and damage to the property.
Units Might Not Age Well
Brand-new freehold townhomes are great, and this type of property is typically a better investment for the first five years. However, around the 10-15 year mark, you start noticing how great (or not so great) the neighbourhood really is. Make sure to stroll your potential community before buying: Are the properties well-maintained, or are they being neglected? Freehold complexes can become overrun very quickly when they are not managed correctly.
Freehold Townhome Prices Are Rising
The demand for freehold row homes has increased significantly over the years, raising prices to a point where they aren’t that much cheaper than semi-detached and small detached homes in certain areas.
How’s The Freehold Townhome Different Than The Condo Townhome?
When you purchase a condo townhouse, you own only the interior unit; the exterior is communal. The exterior of your condo unit and the common areas are owned by all the residents living in the complex. These spaces are regularly kept up through monthly maintenance fees that every resident pays.
A board of directors that works directly with the condo corporation manages all the condo townhouses in the complex. This personnel ensures the building is running smoothly and everything is taken care of. As a condo townhome owner, you don’t own the exterior of your home, which means you need permission from the corporation to make changes or any improvements. Even if you get consent, there might be guidelines and limits on what actions you can take.
With a lower-than-average price tag, condo townhouses are often more appealing to customers than freeholds. Though prices have gone up in almost any Canadian city, condo townhomes are still an attractive housing option for a lot of people, most of them young professionals or singles.
A significant plus for condo townhouse owners is having access to shared amenities like pools, and fitness centres, which can be expensive if you were to purchase these luxuries on your own. In addition, the shared ownership of common areas provides a stronger sense of community living.
Is A Freehold Townhome The Right Choice For Me?
The answer to this question depends on each homebuyer’s specific circumstances and their needs and wants when searching for Canada real estate. Here are some key points that may offer additional guidance:
- Freehold townhomes are a fantastic choice for first-time homebuyers looking to upgrade to a detached, larger property in a few years.
- Freehold townhomes offer more space and freedom than a condo, so they are convenient for growing families looking for a private and affordable space to create lasting memories.
- Freehold townhomes are typically the go-to property type for Canadian real estate investors looking for a positive return on their investment. By buying freeholds, they avoid paying monthly maintenance fees on top of mortgage payments.
What’s A Freehold Townhome? – Conclusion
If you’re thinking about whether a freehold townhouse is the right ownership type for you, consider the pros and cons we’ve listed. From price points to maintenance fees, there are several things to take into account. Our suggestion? Get in touch with a local eXp real estate agent who can help you find and buy a freehold townhome that fits your needs and budget.
