To Buy A Loft Or Townhome?

[emirate25]

I am a single 26 year old young professional and I am finally going to go through the big commitment in buying my first place this year.

If you were in my position, what would you rather buy...a townhome in the inner city Houston area or a loft (condo) in downtown? What would have a better resale value down the line?

Your advice is welcomed. Thanks.

[musicman]

you have to consider lots of things. location for the townhome would probably be most impt factor if you're going to sell in a relatively short time.

[emirate25]

I am thinking in reselling 5-8 years from now. Are there areas in the inner city Houston area where you recommend to avoid for a townhome?

[musicman]

I am thinking in reselling 5-8 years from now. Are there areas in the inner city Houston area where you recommend to avoid for a townhome?

where do you work? i know i would hate to buy a place in a certain location if the commute is difficult.

[emirate25]

where do you work? i know i would hate to buy a place in a certain location if the commute is difficult.

I work in the heart of downtown ...The Reliant Energy Plaza building.

[musicman]

I work in the heart of downtown ...The Reliant Energy Plaza building.

what type of price range? what type of things concern you about where you live now? what do you like about where you live now?

[emirate25]

what type of price range? what type of things concern you about where you live now? what do you like about where you live now?

I'm currently leasing at St. Germain and I love it. There is nothing that concerns me as of now.

My price range would be 150k - 200k.

[musicman]

I'm currently leasing at St. Germain and I love it. There is nothing that concerns me as of now.

My price range would be 150k - 200k.

if you're already downtown and enjoy it, i'd probably consider staying there. i know some of the lofts have high monthly fees which may not make them as affordable.

[TheNiche]

if you're already downtown and enjoy it, i'd probably consider staying there. i know some of the lofts have high monthly fees which may not make them as affordable.

^What he said. Don't forget to factor in maintenance fees and property taxes into what you can afford.

If possible, I'd suggest that you try to find a reasonably priced fee-simple townhome just east of US 59. And given your 5 to 8 year outlook, try to position yourself near a proposed LRT stop. That'll come in handy before long.

[HoustonRealtor]

As a very general rule, townhomes are typically more desirable here than lofts. There are a lot of people in the Houston market that don't want to live in a building shared by others, with elevator access and parking that is not right outside their front door. With that being said, there is a market for lofts, there just isn't as large of a base of buyers for them.

Townhomes tend to provide more privacy, along with a private garage and a yard or patio. These are very appealing features to many people. The one issue that comes up most with townhomes is that they are on multiple levels. Some people don't want, or can't handle, the stairs.

If you do a lot of entertaining (most people don't), keep the parking situation in mind. Some of the lofts have minimal parking so guests must park on the street or in a remote lot, usually for a fee. Townhomes may or may not have a private driveway, and street parking may be limited. For example, the Rice Military area has so many driveways, that there is little room to park. In addition, many streets are rather narrow.

And don't forget the maintenance fee. It will be higher in a loft that has a building to maintain (including elevator, common space, etc), and even higher if there is a concierge or doorman. Townhomes vary depending on what is included. Many newer townhomes do not include maintaining the exterior, so it is the individual owner's responsibility to paint, re-roof, etc. as needed.

[emirate25]

Yes your right. I've noticed some of the maintanance fee's on downtown lofts are high.

[sowanome]

Yes your right. I've noticed some of the maintanance fee's on downtown lofts are high.

Since you work downtown, this should be perfect for you.When you get off of work today, drive west on Prarie and it will turn into MEMORIAL, drive Memorial until you reach Memorial park...Turn around and head back east on Memorial and turn right at Sheperd and take sheperd South until you reach W. Gray, turn left on w. Gray and take a left at waugh...drive up waugh until Allen Parkway.. Take allen Parkway back downtown.......When I moved to Houston this ride sold me on its beauty and convienience. ( I hadn't even driven down Kirby @ this point???)By the way, if you can find a private driveway/unshared parking and a backyard/patio area you will be at the top of the appreciation list : (the driving times are door to door) I wrote this to someone yesterday:

My opinion (mid to upscale range) :

1) Stay away from the ballpark area and certain parts of TMC/Midtown. The only problem with TMC/Midtown is that it's a long way from being a fully developed area. (lack of parks that are walking distance, grocery stores, retail, etc.)

2) Look in areas that border West University, River Oaks, Memorial Park, Upper Kirby and Breas Park.

3) Purchase a townhome/condo in the Rice Military area that's close/bodering Memorial Drive(enough said). Your ride to TMC will be less than 10 mins/ Ride to D.town less than 5 min/ Ride to galleria area less than 8 min.

4) Purchase a townhome/condo in the Upper Kirby/ River oaks area that's close/bodering Allen Parkway, Kirby or W. Gray. Your ride to TMC will be less than 10 mins/ Ride to D.town less than 7 min/ Ride to galleria area less than 8 min. Drive down W.gray at anytime of day..(enough said)

5) The reason I recommend these areas are for the obvious: there are still deals out there, the areas are established and attached to the most sought after communities in Houston, they are ultra convenient, the grocery stores/ retail options are great, and if the developers of West Ave, 2727 Kirby, Regent Square, Memorial Hills, and The Caceres are willing to invest more than $500 million in these areas.......that's a sign.

6) Please, when you visit Houston again, drive west on W. Gray and take a look around. Also drive West on allen parkway from downtown until it turns into kirby and keep driving South down Kirby until you get to the Rice village area. Also drive west on memorial from downtown so you can see Memorial Park and rice military. Trust me you'll be happy.....Here are some comps....Remember, it's all about location, location, location and the cheapest always has the most room for appreciation/upside. sorry, didn't find anything in west u.

Great Location/Walking distance to w. gray shopping/dining and new regent square (These will appreciate @ a very high rate):

http://search.har.com/engine/dispSearch.cf...mp;backButton=Y

http://search.har.com/engine/dispSearch.cf...mp;backButton=Y

http://search.har.com/engine/dispSearch.cf...mp;backButton=Y

Other:

http://search.har.com/engine/dispSearch.cf...mp;backButton=Y

http://search.har.com/engine/dispSearch.cf...mp;backButton=Y

http://search.har.com/engine/dispSearch.cf...mp;backButton=Y

http://search.har.com/engine/dispSearch.cf...mp;backButton=Y (great deal/location...behind caceres= high rate of appreciation)

http://search.har.com/engine/dispSearch.cf...mp;backButton=Y(great deal/location...behind caceres= high rate of appreciation)

[TheNiche]

Stay away from the ballpark area and certain parts of TMC/Midtown. The only problem with TMC/Midtown is that it's a long way from being a fully developed area. (lack of parks that are walking distance, grocery stores, retail, etc.)

The reason I recommend these areas are for the obvious: there are still deals out there, the areas are established and attached to the most sought after communities in Houston, they are ultra convenient, the grocery stores/ retail options are great, and if the developers of West Ave, 2727 Kirby, Regent Square, Memorial Hills, and The Caceres are willing to invest more than $500 million in these areas.......that's a sign.

The tradeoff that Emirate will face is between quality, location, and risk aversion. I agree that your list of locations is presently better, but anything that is remotely affordable will be 25+ years old.

Looking at it from an investment perspective, an older product in a better area will rely on land price appreciation as the improvements rapidly depreciate in value and ultimately zero out. In contrast, a newer home in an E. Downtown or Midtown location will depreciate at a slower rate over the 5-to-8-year span, and on account of all the improvements planned for the immediate area and the prospect of an increased retail base within a few years, underlying land values may rise much more rapidly than in a mature area such as west of downtown.

[emirate25]

i was looking at townhomes east of 59. Sowanome, why would you say to stay away from Ballpark area?

[rapturematt]

In reality, I think the Loft would be the best bet simply because it is perfect for a young professional person. You have very little maintenance, if any. You really don't need way to much room being single. I would find a split level loft if you can and maybe something on the top floor with roof access or something with a patio. It is worth the extra money to be on the top floor because it will always be the most desirable and if it has a roof access, it would act as another room when you need it for entertaining.

Loft living is hip and fun, town homes are great transition for when you are ready to take the next step in a relationship or marriage and need the room for in-laws, and before you know it, you are going want to move to the burbs or some place that you have to mow the grass.

[considering]

I was where you are at about 3 months ago (first home, young, single, working DT, similar price range), Emirate, and I decided on a townhome in Midtown. That said, I considered several places: the Heights, East End, DT (even St. Germain for that matter), and Midtown. In my mind, each of these places have merit and should appreciate with time (given the Houston economy holding steady--another thread) as well as certain drawbacks. Midtown fit best with my criteria at the time I searched--location to DT, appreciation potential, in my price range, low maint. fees, not too old. So far, I am quite pleased.

[ToryGattis]

I'll just note that a common mistake of first-time home buyers is buying too much space - much more than they need. A home is not just an investment, but a regular, real cost - not just for the building and land, but the maintenance and utilities. Paying for unused space is just waste. So, while townhomes can be an attractive investment, they probably have a lot more space than you need (3+ bedrooms). An efficiency or 1 bedroom loft might be a better overall investment if you fully cost it out, although certainly beware of the annoying maintenance fees. Also, in general, I think you'll have a better return-on-investment buying used rather than new construction - loft or townhome. The new construction premium is high and tends to depreciate rapidly (just like the first year of a new car).

[considering]

I'll just note that a common mistake of first-time home buyers is buying too much space - much more than they need. A home is not just an investment, but a regular, real cost - not just for the building and land, but the maintenance and utilities. Paying for unused space is just waste. So, while townhomes can be an attractive investment, they probably have a lot more space than you need (3+ bedrooms). An efficiency or 1 bedroom loft might be a better overall investment if you fully cost it out, although certainly beware of the annoying maintenance fees. Also, in general, I think you'll have a better return-on-investment buying used rather than new construction - loft or townhome. The new construction premium is high and tends to depreciate rapidly (just like the first year of a new car).

Great point on the too much space issue. I bought more space than I currently need but I did that knowingly since I wanted to make sure I could grow into it, you know, single to married and maybe, just maybe a baby. My thinking was that I didn't want my future situation to force me to sell earlier then it made financial sense to do so. Of course, I'll probably marry a girl who will suddenly HAVE TO live in a bigger place and all my planning will be for nought!

[rapturematt]

I totally agree with you about the don't buy new. It seems more logical to buy used for much less and then you hire a interior designer to come make it what you want for half of the money you will save.

[crunchtastic]

Great point on the too much space issue. I bought more space than I currently need but I did that knowingly since I wanted to make sure I could grow into it, you know, single to married and maybe, just maybe a baby. My thinking was that I didn't want my future situation to force me to sell earlier then it made financial sense to do so. Of course, I'll probably marry a girl who will suddenly HAVE TO live in a bigger place and all my planning will be for nought!

Knowing what the average townhome square footage in Midtown is like--- if a girlfriend/fiance can't comfortably accomodate into your 1700-2000 sq. foot space shared by two people, and insists on more space, seriously, you're screwed. Really! Run, don't walk, away. Just a friendly tip. Good on your forward thinking , though!

[considering]

Knowing what the average townhome square footage in Midtown is like--- if a girlfriend/fiance can't comfortably accomodate into your 1700-2000 sq. foot space shared by two people, and insists on more space, seriously, you're screwed. Really! Run, don't walk, away. Just a friendly tip. Good on your forward thinking , though!

[TheNiche]

The new construction premium is high and tends to depreciate rapidly (just like the first year of a new car).

Let me be clear on what I meant: buy new(er). There is a large first-year depreciation effect. But once it gets too old, depreciation accelerates again on the basis of expected repairs and maintenance.

[crunchtastic]

But once it gets too old, depreciation accelerates again on the basis of expected repairs and maintenance.

Too old, indeed!

I've never owned a house younger than 20 years old. Assuming brand new construction, after how many years does stuff start falling to sh**t?

[musicman]

Assuming brand new construction, after how many years does stuff start falling to sh**t?

With some of the newer ones made of synthetic stucco, it is surprisingly too short of time.

[rapturematt]

Assuming who really builds the structure depends on the quality that you are getting. If you are looking at highrise lofts, you really don't have to look at it as much simply because you know that it was pretty much built to commercial standards, but townhomes are a different story. We all know what some of the townhomes are built like. Some of them, I would not buy if they were only one year old just because it is put together so poorly.

I still say stick with the top floor loft. It is the best bang for your buck.

[HoustonRealtor]

Small(er) makes sense for a lot of people, but be careful about buying TOO small. It can be difficult for resale. At the same time, I also don't see the point of buying a place that is way too big. It's expensive and wasteful to heat/cool space that isn't used.

[TheNiche]

Assuming who really builds the structure depends on the quality that you are getting.

This is true. Do your due diligence. Make sure that the builder has a good rep. Ask neighbors about what their experiences had been. If the builder is still active (a good sign), walk some of their construction sites with an experienced inspector just before they close up the walls.

Don't assume that older product was built better. I own a property where the main house was built in about 1920 and is solid as can be, but where the addition had been built in about 1950 and had no steel rebar or mesh in the foundation, where joists supporting the roof were sistered together sloppily, and was built out of untreated pine which became overrun with termites and then rotted very easily. I can't fathom anybody getting away with something that bad in the present day. I live in a 1980-vintage condo and often attend the association meetings; this place was built with inferior plumbing supplies, and everyone is paying for it in maintenance fees. I even once had a chunk of moldy sheet rock fall on me from above while in the shower as a result of a busted gasket from a bathtub upstairs. One woman had pipes break several times over the course of last year, flooding her unit each time, and putting her in an association-paid hotel room at length.

[musicman]

when you see pressed wood anywhere on a house...sheathing and especially roofing, just stay clear. if they'll cheap out here, they'll cheap out everywhere else too.

[RedScare]

i was looking at townhomes east of 59. Sowanome, why would you say to stay away from Ballpark area?

If you read a lot of sowanome's posts, you'll see that he has a preference for new and clean. Nothing wrong with that, but it may explain his distate for the East of 59 area. I lived on Memorial near the Park for 5 years, and it IS nice. However, the dynamic is completely different than Downtown/MMP or even Midtown. I also agree with Niche that Rice Military, having been established for a few years, will not appreciate as quickly as some of the older areas with a lot of upside potential.

I believe that Downtown will get better in the 5-8 year timeframe you are looking at, but the maintainance fees can indeed be a drag. I would be very interested in East of 59 for several reasons. The rail will be going in. It is cycling or cab distance to Downtown. It has an edgy feel that appeals to those that like living in Downtown. Because it is new to residential, the prices are lower.

Good luck.

[sarahiki]

If you read a lot of sowanome's posts, you'll see that he has a preference for new and clean. Nothing wrong with that, but it may explain his distate for the East of 59 area. I lived on Memorial near the Park for 5 years, and it IS nice. However, the dynamic is completely different than Downtown/MMP or even Midtown. I also agree with Niche that Rice Military, having been established for a few years, will not appreciate as quickly as some of the older areas with a lot of upside potential.

I believe that Downtown will get better in the 5-8 year timeframe you are looking at, but the maintainance fees can indeed be a drag. I would be very interested in East of 59 for several reasons. The rail will be going in. It is cycling or cab distance to Downtown. It has an edgy feel that appeals to those that like living in Downtown. Because it is new to residential, the prices are lower.

Good luck.

You mentioned biking to downtown: Here is a link to the city's info on the Columbia Tap rails-to-trails bikeway. The concrete has been poured over here in the Third Ward, so the project is happening. It will provide a bike trail along the east side to downtown, and south to the Med center. And by the way, it is one block from my townhouse, which happens to be for sale...

http://www.publicworks.houstontx.gov/bikew...railtotrail.htm