A duplex or townhouse can be a more affordable alternative to a detached single-family home, yet offer a taste of that homeownership. These medium-density housing choices are sandwiched between suburban and high-density development.
When deciding on a duplex vs. townhouse, consider the amount of space you need, the amount of maintenance you want to do, your budget, and whether the rental component of a duplex — or Aunt Jill, Cousin Joe, or Mom next door — appeals to you.
Let’s take a deep dive into the differences between a duplex and townhouse.
Key Points
• A duplex is a single building divided into two living units, often sharing walls or outdoor spaces.
• A townhouse is a multi-story home attached to other units, typically with a shared wall.
• Duplexes offer financial benefits like rental income, while townhouses may provide more living space.
• Duplexes may have higher initial costs and a potentially more complex tax situation, whereas townhouses offer more privacy.
• Financing options for both properties include conventional and government-backed loans.
What Is a Duplex?
A duplex is a single structure with two conjoined units on one plot of land. Each unit has its own entrance, kitchen, bedrooms and baths. The two units often share the yard, laundry area, and garage space, but that isn’t always the case.
A duplex shouldn’t be confused with a “twin home,” which is two homes that share a wall, but where each unit and the land it sits on is individually owned. The lot line actually runs through the common wall.
Buying a duplex is often touted as a good investment because owners can rent out one side while living in the other.
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Types of Duplexes
There are two common configurations when it comes to duplex living:
• Side by side. The shared wall is in the middle.
• Up and down. When the units are in an upstairs and downstairs arrangement, the dividing wall is the floor/ceiling.
What Are the Pros and Cons of Duplex Living?
Duplexes are in demand, often by first-time homebuyers.
Owner-occupants have a big financing advantage: If you buy a multifamily property of four or fewer units and plan to live onsite, you can use an FHA loan with a low down payment or a VA loan, if you’re eligible, with no down payment at all.
There are other upsides, and potential downsides, you may want to consider before deciding on a townhouse vs. duplex.
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Duplex Pros:
• May be more affordable than a traditional single-family home
• Usually less maintenance than a single-family home
• More residential feel than an apartment
• Half or all can be rented out
• Usually has a washer and dryer
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Duplex Cons:
• Shared wall and yard means limited privacy
• Owners still have some maintenance responsibilities
• Usually more expensive than a condo
• The neighbor sharing your wall may be loud, or a relative next door could be intrusive
• If both units will be rented out, an investment property loan typically calls for at least 20% down and has a higher mortgage rate
What Is a Townhouse?
You get the idea about duplexes. Now let’s look at what is a townhouse. A townhouse is an individually owned home with two or more stories and at least one shared wall.
You own the inside and outside of your unit and the land it rests on, whereas a condo owner owns the interior of the condo. A townhouse has a separate entrance but may share communal spaces.
Townhouses are often found where land is in short supply. This is particularly true in areas that transition from dense, urban cities to the suburbs. They make good use of the space with their vertical nature and shared walls.
They are typically lower priced than detached single-family homes. By the way, the U.S. Census Bureau, which tracks residential construction, considers townhouses and duplexes single-family homes. Getting a mortgage on a townhouse is similar to obtaining a home mortgage loan for a freestanding house.
Townhome ownership has been rising, and the National Association of Home Builders (NAHB) says the long-term prospects for townhouse construction remain positive as homebuyers seek medium-density residential neighborhoods such as urban villages.
The NAHB reports that townhouses made up almost 15% of new single-family homes in the second quarter of 2024, and the number of new townhouses being constructed has been on the upswing in recent years.
What Are the Pros and Cons of Townhouse Living?
As the prices of traditional single-family homes have gone through the roof in most markets, townhomes have become popular as starter homes.
And downsizers may be attracted to townhouses, whose cost may be lower than their detached counterparts.
Townhouses make great use of space, but they also have less privacy, and you may need to follow the rules of a homeowners association (HOA), if one exists. (In the condo vs. townhouse comparison, condos come with an HOA, but not all townhouse communities do.)
Financing a townhouse works just like financing any single-family home. Here are pros and cons of buying a townhouse compared with a detached single-family home.
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Townhouse Pros:
• Typically more affordable
• May share cost of maintenance in the development
• Townhomes may have amenities attractive to residents
• Full ownership of a property
• Small yard or patio requires less maintenance
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Townhouse Cons:
• May not appreciate as much
• Less privacy
• Owners may need to pay dues each month as well as special assessments
• Neighbors are closer together
• Yard or patio tends to be small
Recommended: Home Loan Help Center
Weighing the Differences Between Duplexes and Townhouse
Taking a look at living in a duplex vs. a townhouse side by side, they have commonalities but also differences. Here are some.
Structure and Design
A townhome typically is in a planned unit development where the homes share walls and community spaces. A duplex is structured to share a yard and a wall with only one neighbor.
Purchase Price
Cost will vary based on square footage, neighborhood, amenities, lot size, and other factors. A duplex will usually cost more than buying a townhouse, but the tradeoff is that you can rent out one side.
Maintenance Cost
A townhouse may have HOA dues, though they might not be ample because owners are responsible for much of their own maintenance. A duplex owner will need to maintain both units and the yard. A comparison will depend on the size and age of the properties and more.
Rental Income
If you plan to rent out a townhouse you buy, it’s a single unit. A duplex has two units, so it may be easier to make the financials work.
Privacy
With a townhome, you’ll be living in a community. Compare that with a duplex, where you’re sharing space with one neighbor.
Then again, having a single neighbor might feel less private than if you had many.
Investment Value
The ability to rent at least one side of a duplex holds more investment value than a townhome. The townhome may also have HOA rules about renting that may not jibe with your idea of how to use your property.
The Takeaway
The difference between a townhouse and a duplex is largely about what type of property fits your lifestyle. A duplex can offer a larger yard and rental potential, but a townhouse may bring that single-family home vibe at a lower price point than either a duplex or a detached single-family house.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.
FAQ
Are townhomes becoming more popular?
The market share of townhomes is rising. According to the National Association of Home Builders, townhouses composed almost 15% of single-family home starts in Q2 2024 and townhouse starts were at an all-time high in a data series that dates back to 1985.
Which is a better investment: a duplex or a townhouse?
A duplex may be the better investment because you have the potential to rent out both units or live in one and collect rent from the other.
Is it faster to build a duplex or a townhouse?
A lot of factors affect how long it takes to build your new home: size, location, materials, weather, subcontractors, the city or county building department, and the complexity of your building plans. Many townhomes are built at once and may become available more quickly. Construction of a duplex is more like a house.
Photo credit: iStock/peterspiro
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