Buying a townhouse in 2019 is a strong real estate investment. But if you want to get a good return on investment with a high-performing rental property, we recommend you consider these top locations for investing in townhomes.
Where to Invest in Townhouses in 2019:
The following data for townhouse investments is provided by Mashvisor’s Investment Property Calculator.
1) Wilmington, DE
- Median Property Price: $168,488
- Price per Square Foot: $110
- Price to Rent Ratio: 12
- Average Days on Market: 118
- Monthly Traditional Rental Income: $1,141
- Traditional Cash on Cash Return: 4.0%
A hot real estate market, Wilmington is first on our list. Because of its impressive average cash on cash return rate, real estate investors can be confident when buying townhouses here. This housing market has experienced a healthy boost in real estate prices and will continue to perform well for townhouse investments in 2019 and beyond.
2) Harrisburg, PA
- Median Property Price: $151,137
- Price per Square Foot: $87
- Price to Rent Ratio: 11
- Average Days on Market: 113
- Monthly Traditional Rental Income: $1,179
- Traditional Cash on Cash Return: 3.1%
Harrisburg has the perfect real estate market trends for buying a townhouse. Townhomes in Harrisburg have one of the lowest prices per square foot on this list. In 2019, an affordable investment property that provides good returns isn’t easy to find; that’s why the Harrisburg housing market is seeing high competition over its property listings. Redfin gives it a competitive score of 78 and reports that homes typically go pending in around 12 days. With 65 percent of its population renting their housing, the rental market in Harrisburg is very strong as well.
3) Philadelphia, PA
- Median Property Price: $272,511
- Price per Square Foot: $285
- Price to Rent Ratio: 16
- Average Days on Market: 81
- Monthly Traditional Rental Income: $1,390
- Traditional Cash on Cash Return: 2.8%
As the inventory of houses for sale remains low in most parts of the US housing market, pressure on residential property prices is expected. That could explain why the average selling price of Philadelphia real estate is 12.9 percent higher than it was last year. Even though prices are high, real estate investors are still buying rental properties because there is high rental demand in this market. The average monthly rental income that a townhouse makes is very sustainable for this type of investment. Although housing stock is low, buying a townhouse to rent out is a smart move in this city. Townhomes hold the largest share of total housing inventory in the Philadelphia real estate market (59 percent).
Related: 10 Best Cities to Invest in Pennsylvania Real Estate in 2019
4) Baltimore, MD
- Median Property Price: $214,896
- Price per Square Foot: $290
- Price to Rent Ratio: 12
- Average Days on Market: 87
- Monthly Traditional Rental Income: $1,503
- Traditional Cash on Cash Return: 3.4%
This is another very competitive market for residential real estate. The city has had a double-digit percentage increase in average selling price as competition heats up. Following the same trends as the Philadelphia real estate market, however, you will find that a large chunk of Baltimore’s housing inventory is composed of townhomes (52 percent). Buying a townhouse in the Baltimore housing market will generate strong revenue and give you a solid rate of return on investment in 2019.
5) Chesapeake, VA
- Median Property Price: $196,015
- Price per Square Foot: $140
- Price to Rent Ratio: 12
- Average Days on Market: 67
- Monthly Traditional Rental Income: $1,327
- Traditional Cash on Cash Return: 3.2%
The median home value in Chesapeake is currently $267,200, after increasing by 4.1 percent over the past year. While single-family homes are the predominant type of property found in the Chesapeake housing market 2019, buying a townhouse is still a good investment strategy. Because you won’t find as many townhomes for sale in this city, if you want to invest here, you should do it while you still have options.
6) Martinsburg, WV
- Median Property Price: $173,155
- Price per Square Foot: $94
- Price to Rent Ratio: 12
- Average Days on Market: 116
- Monthly Traditional Rental Income: $1,209
- Traditional Cash on Cash Return: 2.7%
Buying a townhome as an investment in the Martinsburg real estate market is a smart move if you’re looking for a sustainable investment. Yes, housing inventory is low but this hasn’t pushed prices to an unreasonable point. With 53 percent of the Martinsburg residents being renters, owning a rental property in this market is a smart move.
Related: Is Buying a Townhouse a Good Investment in 2019?
What to Look for When Buying a Townhouse for Investment
Knowing the best cities for a townhouse investment is a good start. However, if you want to know how to buy a townhouse and attain optimal results, there are a couple of factors to consider:
- Take a look at the inventory stock of this property type in the market you choose. It’ll give you a gauge of who has the advantage there, buyers or sellers.
- Check local ordinances and Homeowner’s Association (HOA) rules if you’re going to be part of one.
- Keep an eye out for crime stats, tax rates, and public transportation.
- Understand what kind of maintenance comes with buying a townhouse. As the maintenance cost is separate from your mortgage payment, property tax, homeowners’ insurance payments, and any HOA dues, it’s an important expense that shouldn’t be forgotten.
- Examine the neighboring townhouse units. Are the owners taking good care of those properties, or are they being left in a poor condition? Because townhouses are side by side, renters may be put off by the sight of a run-down townhouse unit next to your rental property.
Related: What to Consider Before Investing in Townhomes for Rent
The most important factor to consider when buying a townhouse is how it will perform as a rental property in 2019. That means even if you’ve found a townhome that is in good condition, you still need to conduct a rental property analysis. The easiest way to do that is to use the same tool which gave us the city-level data listed above. Using Mashvisor’s Investment Property Calculator, you can get a full analysis of the expected return on investment. This tool will help you locate the best townhouse which matches your criteria in your real estate market of choice.
To start looking for and analyzing the best investment properties in your city and neighborhood of choice, click here.
