01
Three Ownership Structures
| Unit lot subdivision | Condominium | Single parcel, all rentals | |
|---|---|---|---|
| Works for | Townhomes, cottages, side-by-side duplexes | Stacked flats, multiplexes | Any type |
| What a buyer gets | Deed to land and home | Unit plus share of common elements | N/A |
| Setup | Unit lot plat, easements, maintenance agreement | Declaration, survey map and plans, association | None beyond the building permit |
| Ongoing management | Light shared maintenance | Association with budget and reserves | Landlord duties |
| Builder risk | Standard residential warranty | Broader statutory warranties under Washington condominium law | Minimal at sale |
02
When Selling Makes Sense
- You need your capital back for the next project.
- The construction loan has a short term.
- Local prices for new townhomes comfortably exceed your cost per home.
- You prefer not to be a landlord.
03
When Holding Makes Sense
- Rents near the lot support permanent financing.
- You want long-term income and appreciation.
- Your tax advisor favors holding (depreciation, deferral strategies).
- The building type, such as a fourplex, is hard to sell unit by unit.
04
The Hybrid Plan
Build four townhomes, sell two, keep two. Sale proceeds retire most of the construction loan; the two remaining homes become low-debt rentals. With unit lots, the decision can wait until construction is nearly finished.
05
Washington Landlord Basics to Know Before Holding
Washington's Residential Landlord-Tenant Act sets rules for deposits, notices and repairs, and several cities layer on their own rental rules. Budget for professional management if you will not manage the homes yourself.
Note: This guide is general information, not legal or tax advice. Talk to a real estate attorney and tax professional before choosing a structure.