Decorate your townhouse to have an uninterrupted view across its public room. You will want to be able to see from the front door out the back door to create the illusion of unlimited space and to invite more natural light into your townhome. Choose furniture that is low profile, in order to avoid anything that will block the view.
Paint your home in simple coordinating colors and avoid using contrasting colors and boldly colored accent walls. Instead, use different hues of the same color to create interest. If you want to use a contrasting color, limit it to accent pillows and small accessories. Neutral colors will work best in small spaces such as townhouses, but neutral does not have to be shades of white: look for light, bright colors and stay away from darker tones.
Think Ikea. You do not have to buy furniture from Ikea per se, but you will want the kind of scaled down apartment-sized furniture that Ikea specializes in. Choose futons and sectionals for seating, skinny bookshelves, and low to the floor TV cabinets. In fact, you might want to wall-mount a flat screen TV for better space usage.
Take a minimalist approach. In townhomes, more is less. The less unnecessary items you have in your home, the better your townhome will look. When you no longer have use for an item, it is best to get rid of it, leaving space for new items.
Create the illusion of more light and space by hanging mirrors in your townhome. Instead of large art pieces, purchase large mirrors. It is fine to display artwork and pictures, but the larger items should be mirrors that reflect light and visually double your space.