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Creative Ways To Buy A Brooklyn Townhouse


During the pandemic, a Brooklyn townhouse became one of the hottest real estate commodities in the Tri-State area. The appeal of living in a large, self-contained home with a private entrance, plenty of room on each floor, and a private backyard gave them an obvious appeal. By the tail end of 2021, Brooklyn’s single-family townhouses had a year-over-year median price gain of 15% with the average price per square foot of all types of townhouses up 8% year-over-year, according to the Corcoran townhouse report.

  • Brooklyn real estate market — a snapshot

    If each New York borough was ranked as a city in its own right, Brooklyn would be the third most populous in the U.S. behind Los Angeles and Chicago. As of 2020, the borough had 2,736,074 residents. Needless to say, Brooklyn’s housing stock is as diverse and varied as its population. However, its townhouses are generally restricted to certain well-established neighborhoods that include Carrol Gardens, Brooklyn Heights, Park Slope, Prospect Heights, Clinton Hill, Bed-Stuy, Crown Heights, and Sunset Park. Although they are all over Brooklyn, these are the areas are known specifically for their towering, majestic brownstones, limestones, brick townhouses, ornate framed/clapboard Victorian-era row houses, and vinyl-sided townhouses.

    A Zillow search of Brooklyn townhouses for sale at the time of writing shows 71 currently on the market throughout the borough, with the highest density occurring in the North and North-West sections. The most expensive is a $17.777 million home in Columbia Heights/Brooklyn Heights. While it is still possible to buy townhomes in the borough for under a million, the largest number for sale currently seems to be in the $2 million to $3 million range. Recently, the most expensive home ever sold in the borough was a Brooklyn Heights brownstone that exchanged hands for $25 million.

  • Factors to consider when investing in a townhouse

    There are numerous factors to consider when investing in a Brooklyn townhouse. These include the following:

    • Condition of the building

      Given the age of townhouses, the condition of the building and the repairs required for it to function optimally, this is a primary factor to consider when purchasing a townhouse. This is why a comprehensive inspection is a must before deciding to make an offer.

      Many of the homes contain older plumbing and electrical work that need upgrading. The heating systems can often be antiquated too, which is why many modern renovations upgrade to mini-split systems that allow for zonal heating. Structurally, a Brooklyn townhouse tends to be very well built but over years some sagging and settling occur which is why they often have sloping floors.

      The flat roofs of townhouses need to be upgraded every 10-15 years. Snow and heat and generally extreme weather put the roofs under a lot of wear and tear.

    • Single-family or multi-family townhouses

      When most townhouses were originally constructed, they were designed to be single-family homes. During the 1950s and beyond many of them were reworked to become multi-family buildings by adding an extra kitchen with approvals from the City. Now there is a movement amongst affluent homeowners to return them back to their single-family glory, undertaking gut renovations to do so.

      Buying a multi-family Brooklyn townhouse as a primary residence has distinct advantages financially if you want to offset your mortgage payment with additional rental income.

    • The homeowner is responsible for all exterior upkeep

      One of the great advantages of owning a townhouse is the fact that you have a back and often front garden of your own. One of the greatest disadvantages is that the building owner is responsible for the upkeep. That includes ensuring no debris accumulates and that the trash is correctly put out during the week. Snow removal from the stoop and sidewalk is another important concern. A failure to do so properly could result in fines from the city which is why townhouses owners that plan to be away from the home often need to have management in place to take care of this, along with the gardening and exterior cleaning.

      Another concern is the timely collection of parcels from the front of the building to protect them from the weather and theft. Many townhouses owners try to offset this issue with high-end mailbox systems but finding the place install them can be an issue.

    • Width matters

      Townhouses are the giraffes of residential buildings — they are tall and thin. Wide townhouses of around 22-25 feet are considered a premium.

    • Creative ways to buy a townhouse

    • Rent to own

      Although renting to own investment strategies are often touted in real estate investment seminars and podcasts, the reality is, in an extremely competitive market like Brooklyn, with bidding wars and all-cash offers, rent-to-own deals are extremely rare. Exceptions do occur, however, when long-term tenants or family members are close to their landlords who may agree to sell them their home under certain conditions.

    • Teaming up

      A recent trend in townhouse buying is for friends to team up to buy a townhouse. Each buyer is allocated a separate floor. If a four-story brownstone is on sale for $2 million and four friends or family members each contribute $500,000 for a 25% ownership stake in the property, it is the equivalent of each buyer purchasing a $500,000 condo for themselves. The advantage of buying a Brooklyn townhouse this way is that they generally appreciate faster than condos and don’t have any monthly maintenance charges. For this to be truly effective, each floor would need to have its own kitchen and bathroom to allow for privacy.

    • FHA Mortgage/House-hacking

      FHA mortgages are government-backed loans that allow buyers to put down as little as 3.5% on a home as opposed to the conventional 20%. For example, a downpayment and closing costs on a $2M 3-4 unit Brooklyn townhouse using a 3.5% FHA mortgage is likely to cost around $100,000. The monthly mortgage payment including taxes and insurance (including PMI) is likely to be a substantial $13,000. However, if you can rent three of the floors out for $3,000 each, making a total of $9,000 in monthly income, you will be left to pay a more manageable $4,000/month for the floor you occupy. This is a technique known as “house hacking” in investment circles.

      A further hack would be for the owner to renovate the cellar and use it in conjunction with the ground floor as a duplex. The ground level could then also be rented to Airbnb guests, lowering the owner’s monthly expenses further still.

    • Nonprofit and community developers

      There are quite a few home buying programs that provide downpayment assistance to middle-class families interested in buying 1-4 unit buildings, which includes Brooklyn townhouses. The downpayment assistance can be substantial — as much as $100,000 — providing the buyer has gone through the requisite community-based counseling programs and meets the income guidelines. Some of these programs include:

      1. HomeFirst Program
      2. Teacher Next Door
      3. Good Neighbor Next Door
      4. NACA’s Best In America Mortgage
    • Airbnb/Short Term Rentals

      Some real estate professionals may tell buyers that Airbnbs are not allowed in New York City. That’s not strictly true. Although you cannot rent out a property you do not occupy to Airbnb tenants in New York, you can rent out bedrooms in your personal residence to Airbnb guests. If you own a single family Brooklyn townhouse, this can be an extremely lucrative way to generate extra income without having to deal with long-term tenants. While a lender will not consider Airbnb income in approving you for a mortgage, once you have a loan, the extra short-term rental income is a great way to help pay it.

    • Seller financing

      Again, in the current competitive Brooklyn housing market, don’t expect to find many or any owner owners offering seller financing. However, if a family member is selling their home and owns it outright, or is interested and traveling and leaving behind the day to upkeep behind then, seller financing might be an option for them. Essentially the seller becomes the bank and they finance the purchase of their home to a buyer who pays them a mortgage. The advantage to the seller is that they can derive a monthly income from the home and it is an effective way to decrease/eliminate capital gains tax.


For many people, a Brooklyn townhouse, in the current overheated market, might appear to be out of reach. It’s true, amid all-cash offers and bidding wars it can be hard for many buyers to compete. However, if you do get an offer accepted, implementing some of the strategies mentioned here, could help you not only get approved for a loan but also help you pay it off.