In the past decade I’ve noticed an increase in the demand for freehold townhouses in Mississauga and other areas of the GTA. Generally lower in price than semis or detached homes, freehold town homes offer an affordable alternative for first time homebuyers and move up buyers who are thinking of selling their condo apartment.

However, before I can go over the pro’s and con’s of owning a freehold townhouse, I will first explain what a freehold townhouse is, and how it’s are different from a condominium townhouse.

Freehold Townhouse Definition

A freehold townhouse or sometimes referred to as a Row House, is simply a house attached on both sides but all the same rules apply as with a traditional detached house. There are no management fees, and no condo board and no common areas. A freehold town home usually fronts on a public road, and the owner is responsible for all maintenance and costs associated with the home and property.

Because price and monthly cost to own is such a big issue, especially for first time buyers, the general opinion out there among home buyers is that freehold is always better than condo. Even I felt the same way when I was a first time home buyer.

I’m sure we will all agree it’s great not to shell out monthly maintenance fees, but there are some disadvantages to freehold over condo townhouses that a buyer should be aware of.

Pro’s of Freehold Townhouses

• No condo fees: which can save a lot off the bottom line of your monthly payment.
• Due to the absence of condo fees, the demand is higher among entry level buyers and this can help freehold townhouses go up in value quicker than the traditional condo townhouse.
• While owners are responsible for all of the costs, they have the choice of when and where to spend the $$$. This is especially good for cash strapped homeowners.
• They look great when brand new.

Con’s of Freehold Townhouses

• No condo fees:  Unlike a condominium complex, with freehold there’s no one taking care of the maintenance which means it’s up to the owners. Saving the money is great, but you always run the risk (especially in the lower price ranges) of having neighbours neglect this. It’s bad enough when you have 1 bad egg on a street of detached houses but when you have a number of neglected homes that are connected it can look horrible.
• They don’t age well. I find for the first 5 years that freehold townhouses are a much better investment. It’s usually at the 10-15 year mark that you really notice the caliber of the neighbourhood. Are the homes being cared for? I can tell you horror stories of freehold complexes that look completely run down.
• Price: Because demand is so high, freehold row homes have risen in price to the point that they aren’t that much more affordable than semi detached and small detached homes.

Who are Freehold Townhouses good for?

• First time home buyers who will move up in a few years.
• Buyers who want the freedom of a house without having to pay the price of an average home.
• Investors because these properties can offer an opportunity to turn a positive return on investment when you don’t have to pay monthly maintenance fees.

Search for Freehold Town Houses in Mississauga

Condo Townhouses

While Free hold town homes are popular with today’s home buyer, the majority of town homes in Mississauga are still ‘condo’ meaning that you will be paying maintenance fees to cover the exterior upkeep of the homes and maintaining the common areas.

Pro’s of Condo Town Homes

• Maintenance fees can cover large ticket expenses such as roofs and windows. For buyers that don’t have a lot of extra cash, shelling out thousands to replace a leaky roof can be difficult.
• Compared to Freehold, Condo Town Houses are usually more affordable. Since condo fees are calculated into overall carrying costs, buyers have less money to put on the mortgage.
• Condo town homes provide buyers with an affordable way to buy a home in an expensive area.
• Condo corporations usually take care of exterior maintenance, and in many cases this means clearing snow and cutting lawns.

Con’s of  Condo Town Homes

• Maintenance fees generally go up over time, and high fees can have a negative effect on re-sale value.
• You have to follow the rules of the condo corporation, which means you can’t do whatever you want to the exterior of your home.
• A condo town house community is only as good as it’s management company. If you have good management and the corp is run well you’ll enjoy the benefits of carefree living. If you the management is bad it can be a disaster. It’s best to check the history to see how the community has performed over the past few years.
• Major capital expenses such as roads can cost a lot of money. If the finances are not run well and the condo reserve fund is low, it’s possible you will have to pay additional money in the form of a special assessment.

Who are Condo Townhouses good for?

• Buyers who want to live in an area that they can’t afford to buy a free hold home in.
• People who travel a lot and don’t have time for exterior upkeep.
• Buyers looking for an exclusive community. Not all Condo town homes are ‘affordable’, in fact, there are very wealthy condo town home communities where the fees keep the community exclusive.

Search for luxury Townhouses in Mississauga

Affordable Town Homes for Sale in Mississauga

The Verdict

For most younger buyers and investors, freehold town homes represent a more affordable opportunity to own a home. For seniors and down-sizers, finding the right condo community may be better for your lifestyle. The challenge is understanding the pro’s and con’s of freehold townhouses, and finding the right area to live. Looking for a town home in Mississauga or the West GTA? Let’s Talk!