First Person: Escaping the Townhome Trap

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Living in a townhome in a master-planned community sounded like the perfect arrangement when I was single. I'd have access to a fitness room, swimming pool and none of the home maintenance hassles.

But I never imagined owning a small, 1,200-square-foot townhome would end up costing more than a single-family home twice the size. A condo or townhome is not the best starter home if your goal is to save money or pay off your mortgage early.

I admit I was clueless about the home-buying process. I sat down with a new-home sales agent to go over the sales contract, but did not see the hidden costs of owning a townhome. Here are a few of the things I wish I had known before I fell into the townhome trap.

You may have CDD fees

I assumed the community development fees, or CDDs, included all the maintenance. However, the CDD fees are added to the mortgage payment each month to cover the cost of developing a subdivision with amenities. In Florida, a lot of subdivisions charge a CDD fee and a few do not. My CDD fees added $200 a month to my monthly condo costs.

Expect maintenance fees

In addition to the CDD fees, I had to pay $150 in townhome maintenance fees. Some of my fellow townhome owners fell behind on paying their maintenance fees to the management company. The management company would put a lien against their property, which meant they would have to pay the fees out of the sale of the home.

Negotiate the appliances

After I purchased the townhome, I found out from a neighbor that "everyone" had negotiated the appliances as part of their purchase. In other words, they received free appliances as part of the deal. I wish I had used that as a negotiating point before purchasing a townhome.

Storage may be limited

I purchased a townhome that did not come with a garage. I did not realize the townhome itself lacked any real storage space because I just didn't think about it. Although the master bedroom had a spacious closet, the other two bedrooms had small closets. I had no other place to store my stuff. Fortunately, we had one designated car space in the parking lot, but visitors were out of luck.

Tow your own trash

Living in the townhome we had to take our own garbage out to the two dumpsters in the neighborhood. Because people had so much trash, the dumpsters were always overflowing. A few of the members of the townhome association took it upon themselves to pick through the garbage to find who was throwing their bags to the side of the dumpsters so they could assess a fine.

Expect unexpected assessments

Just because you live in a townhome and pay maintenance fees does not mean you are immune to special assessments. Our townhome association found out we needed gutters installed to rectify a drainage problem. We were all assessed a fee.

Don't bank on a quick sell

Being stuck in a townhome or condo during a sluggish housing market is especially painful. Some people assume a townhome or condo is a safe investment because they can always sell it. Just because there is a high turnover, does not mean you'll turn a high profit especially if you fall into a spending trap trying to fix up the condo. In 2001, a townhome like mine sold for $72 a square foot. In 2005, it jumped to $108 a square foot and then $137 in 2006. By 2010, the average townhome in my old neighborhood went for only about $52 a square foot.

To sell my townhome at a modest profit, I used a few DIY home staging tricks. But all the clever staging in the world could not have helped me escape the townhome trap when values tanked a few years later. If I could go back, I'd rent an apartment in a heartbeat until I was ready to purchase my forever home.

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