Are Townhomes Bad For Rentals?

[Hayes Mercure]

Hey! I've only been looking at SFR in the metro Atlanta area for my first buy and hold rental purchase, but recently came across a townhome that looks interesting. It's down to the studs(looks like someone ran out of cash on their rehab), so it would need a pretty good rehab to get it up to speed. I haven't heard much about townhomes as rentals.

Are they a bad idea from an investment standpoint? I know you have to consider HOA fees in your monthly costs but are there any red flags with these? The property is right by the Atlanta airport, which has a great AirBnB market, so I'm thinking maybe that's a route to take for rent income.

Any thoughts/experience on renting a townhome?

[Andrew Turner]

Depending on the area, Townhomes can be just as, if not more, profitable than traditional SFR. In most cases, the HOA will cover some of the expenses that you would typically need to account for in SFR. Do you know if the roof, landscaping, etc. is your responsibility? As far as your occupancy strategy, Atlanta has a great AirBnB market. If the DD you've done thus far supports it, I would take that route all day. Its gaining a lot of traction around the city. There is a ton of development going on around Hartsfield-Jackson right now, with the Aerotropolis plans and more. I would get in while you can. Worst case scenario, you lease it to a traditional tenant and let the property appreciate over the next several years. How much rehab are you anticipating for the project? I work with a number of investors as an agent selling distressed property, so if you were to need help pulling comps, connecting with contractors, or anything else regarding the project, I'd be happy to help. Best of luck!