Home Buying in San Ramon>Question Details

Ryan, Home Buyer in San Ramon, CA

Is it better to buy a Single family home or a townhouse in San Ramon if they are around for the same price point and in the same year built?

Asked by Ryan, San Ramon, CA Sun Apr 27, 2014

Most of the SFH homes we are seeing have zero lot line ones with back/side yard of the same size of a townhouse patio. So in terms of long term property value appreciation, is it better to buy a SFH or TH? Also, with TH, we get a bigger living space (2000 sq ft) as compared to SFH (1600 sq ft). I am interested to know your thoughts and value your time responding to this.

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Ryan, there are some great answers already, but I would add from a long term perspective, do you see this purchase becoming an investment and a rental property for you? Townhomes are great because there is very little landscaping to care for, they usually have a pool available but some communities may have parking limitations/issues and high HOA fees. From a detached property, you have a little more latitude in regards to what you can do with your home, more flexibility if you wanted to rent out the property in the future and if it is a 3-4 bedroom, these can very easily be rented to families that are more than just 2 people. Of course the CC&Rs and HOA docs (if applicable) would need to be reviewed). Also, in some cases, the zero lot line communities may have a low HOA fee, but have a pool and tennis court(s) which could be used (Twin Creeks Area has a few). I hope this helps and please feel free to contact me if I can be of further assistance alpacheco8@comcast.net
0 votes Thank Flag Link Mon Jun 2, 2014
To reiterate what Joyce said, you may want to consider the HOA dues for a townhouse. HOA dues for condos & townhomes in the San Ramon area can range from $100 to $300+ per month. A lender will factor in HOA dues in your debt-to-income ratio (which is your total monthly debt divided by your total income). Here’s an example on how that can play out and how your monthly income may be a factor in your decision.

Assume an $500,000 purchase price with 20% down. The loan amount would be $400,000.
For the sake of this example, assume a 4.375% interest rate (for a 30-year fixed loan), your monthly principal interest taxes and insurance for the single family home would be about $2,634
Now add another $200 to the monthly payment for HOA dues and your total payment increases to $2,834 for a townhouse.

For this example say you have about $800 per month in debt (car payment, credit cards, etc).
For a single family residence your total monthly obligation would be $3,434, while for a townhouse your total monthly obligation would be $3,634

In order to qualify for a conventional conforming loan, your debt to income ratio needs to be below 45%. To purchase the single family residence you would need to make at least $7,632 per month. And to purchase the townhouse you would need to make at least $8,076 per month.

Please keep mind these are rough numbers. If you are not already working with a lender, I would be happy to run your specific scenario for you. I work with a lot of buyers in the San Ramon & Dublin area who are trying to make the determination between purchasing a single family residence and a condo/townhouse.

Lisa Shaffer
Mortgage Loan Advisor
NMLS# 1076586 BRE# 01936908

3240 Stone Valley Rd. West, Alamo, CA 94507

925.402.4882 phone
510.334.4524 cell

lshaffer@rpm-mtg.com email
http://www.rpm-mtg.com/lshaffer website
0 votes Thank Flag Link Wed May 7, 2014
Joyce Chiu- Realtor, East Bay Area-Keller Williams

I would say it really depends on your needs and your lifestyle. I have been a resident in San Ramon for over ten years. If you feel more living space is what you need, then a townhhouse is the way to go. If you don't want to deal with the HOA ( homeowner's association fee), then perhaps a single family residence is what you need. A SFR usually values more than a townhouse, but again it depends how much space you want and need for your current living situation.

Hope this helps! Call or email me if you have any questions, I would be more than happy to assist.

0 votes Thank Flag Link Mon Apr 28, 2014
The best reason to buy a home or town home really depends on the buyer's needs. Generally speaking,. houses appreciate better - but they area also way more work to maintain. If all the adults in a family work or travel a lot, living in a townhome is much easier.

You state that you get more living space with the townhome...the question is whether that is more important to you than predicted value in the future. Go where you will enjoy living the most. That's my advice!
0 votes Thank Flag Link Sun Apr 27, 2014
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