A stacked townhouse is a hybrid between a townhouse and condo, and they can be either part of a condo corporation or a freehold. A stacked townhouse will have multiple dwellings and be built with a 2-storey floor plan. Stacked townhouses and condos are becoming common in highly dense urban cities, like Toronto, Vancouver and Montreal.
In general, home buyers are getting priced out of homes in urban city centers such as the GTA. A stacked townhouse condo offers home buyers a new type of property that is less expensive. These types of homes offer homeowners with convenience, affordability, and comfort.
For first-time home buyers; the price of a semi-detached or detached home may be out of their budget. However, a stacked townhouse offers a more affordable price point. In comparison to a traditional condo, a stacked townhouse can offer a more spacious floor plan.
Here is a great read on the differences between stacked townhouses and condos.
Table of Contents
Advantages and Disadvantages of Stacked Townhouses
Let’s consider some of the advantages and disadvantages of buying a stacked townhouse.
| Advantages of Stacked Townhouse | Disadvantages of Stacked Townhouse |
| Affordability | Lower Appreciation |
| 2-Storey Floor Plan | Limited Outdoor Space |
| Cheaper Insurance | Maintenance Fees |
| Amenities | Lack of Storage |
| Hassle-free Maintenance | Restricted Regulations |
Stacked Townhouse Advantages
Affordability
With current real estate prices soaring high, first-time home buyers considering buying a property can look into stacked townhouses. A stacked townhome is built with multiple levels, maximizing the land area. Since multiple dwellings are built on a restricted area of land, the cost savings can be dramatic.
These stacked townhomes are being built all over Canada, including Montreal, Toronto, Ottawa, Vancouver and Calgary.
Since affordability is an important factor in real estate, this will influence many new buyers to consider stacked townhouse condos. They’re generally less expensive when compared to townhouses and single-family homes.
2-Storey Floor Plan
If you like owning a property with a two or three-level floor plan, this would be a great consideration. A stacked townhome will generally include the living room, kitchen and powder room on the main floor. The second floor will include a master bedroom, additional bedrooms and a bathroom. These types of homes do not have basements or attics.
While a stacked townhome is a crossbreed between a townhouse and a condo – it will feel less like a condo and more like a townhome. Some homeowners prefer a space that feels less like an apartment. This type of 2-storey floor plan will add additional interior space.
Depending on the builder’s design, your home may have an open layout or the traditional closed-off floor plan. If you have the upgrade available, an open floor plan can make the home more spacious and upscale.
A brand new build stacked townhouse will have builder upgrades available, which get added to your base price. We recommend reading about our recommended new construction upgrades that add value. Additionally, we would suggest making note of our list of 13 new construction home upgrades to avoid.
Cheaper Insurance
A stacked townhouse will have cheaper home insurance compared to single-family detached and semi-detached homes. In Canada, Square One Insurance offers great prices on home insurance for stacked townhomes.
The maintenance fees you pay your HOA or condo corporation will cover the insurance costs for insuring the surrounding of the property.
The insurance savings you’ll reap may be minimal on a monthly basis, but it can make a difference at the end of the year.
Amenities
The amenities in a stacked townhouse complex will be different when compared to a condo building, but you may have some to consider. These amenities may be outdoor parks, a community pool, a shared lounge area, and a rooftop terrace.
The other amenities include underground parking and guest parking. A fair amount of homeowners enjoy having easy access to these features, so we’re considering them as advantages.
For seniors; there may be limited amenities that help them enter and leave the property, as they don’t have elevators in the dwelling. Usually, these properties are built with only stairs.
Hassle-free Maintenance
As a homeowner of your own single-family home, you will be liable for mowing the lawn, cleaning the outdoor space, shoveling snow, roofing and foundations. However, in a stacked townhouse where you pay maintenance fees – all of this will be covered.
The condo corporation will outsource or pay a contractor to cover maintenance on the property. In these properties, most of the maintenance is completed in a timely manner.
The maintenance cost per stacked townhome owner will vary depending on the size of the home.
Stacked Townhouse Disadvantages
Lower Rate of Appreciation
When you purchase a stacked townhouse, you’re buying the building unit and not specifically the land the property sits on. As a result, a stacked townhome appreciates slower in comparison to a semi or detached home.
However, there is still considerable appreciation to benefit from if you are living in the home.
For example, in the Kingston and Morningside neighborhood of Scarborough, Ontario – a builder was selling a stacked townhouse project in 2016. The project was only delivered in late-2020.
The buyers purchased these stacked townhomes in 2016 at roughly $465,000. These stacked properties were being listed on the MLS in early 2021 for $699,000. And, as expected – these homes are currently getting offers over-asking.
A semi or detached home would have appreciated at a higher rate in this market, but these stacked townhouses still have accumulated a considerable amount of equity.
Limited Outdoor Space
Some homeowners enjoy the benefit of having a front yard or backyard. Whether it’s for seasonal gardening or to enjoy a private patio – this can be a deal breaker for some buyers. If you’re looking for a personal outdoor space – a stacked townhouse may not offer this.
To make up for this loss, some projects will have a communal park or lounge area for the residents in the dwelling.
Maintenance Fees
While all the maintenance is covered for owners of these properties, it does come with a price. The maintenance fees can vary between homes – but they range from $300 – $600 on average. The costs will still be lower than what you may spend to take care of your own land and building.
Some builders do offer incentives for maintenance fees – where they’ll cover the costs for the first 6 or 12 months.
Lack of Storage
While some stacked townhouses may offer locker or storage space – it’s not the same as a private basement. Some homeowners love having a basement or garage to store items. If you need a great amount of storage, you may not find this in a stacked townhouse.
In recent months, many homeowners have started using rentable storage spaces – especially those making the move away from the city core as the work-at-home movement continues.
Restricted Regulations
When a stacked townhouse is part of a condo corporation, there are rules that must be followed. You also cannot entertain large changes to the exterior of your home. All major renovations and changes need to be brought to the board and approved.
You’ll have different regulations in place as noted on your declaration. In general, most stacked townhouses will have regulations to:
- Installing solar panels
- Park on guest areas overnight (usually requires a pass)
- Adding decorative elements to the exterior of the home
- Painting your window frames and sills
- Communal smoking area restrictions
- Quiet hours may be enforced in the dwelling
Privacy
In a stacked townhouse, there is limited privacy. The building will have multiple homeowners, so you’ll be in close proximity to others.
Due to many homes being stacked in the same building, you can also experience noise pollution (another reason for quiet hours). While you do have your own private entrance to your home – the proximity to other dwellers may not be welcome by everyone.
Are Stacked Townhouses a Good Investment?
A stacked townhouse could be a good investment for the right family, as it comes at an affordable price with lower maintenance costs. With the barrier to entry into the real estate market increasing on a monthly basis, a stacked townhouse could be the perfect investment.
Whether you’re planning to live in a stacked townhouse or rent out the property, it can serve as a good investment when cash flow is positive or you’re in an appreciating market.
It’s crucial to do your own due diligence before getting into property ownership – regardless of whether it’s a new construction home or an existing home.
With new stacked townhouses in Ottawa, Toronto, Brampton, Oakville and Mississauga growing at a fast pace, it’s advised to speak to a local realtor and talk to builders in the area.
There are many 2 story townhouse floor plans builders are offering, so you just have to look carefully to find the one that suits you best. Keep in mind that the base price of a stacked townhouse will not include the cost of builder home upgrades. Lastly, we recommend reading about the hidden costs of buying a new build home.