Property types serve a changing and diverse culture
Today choosing a home is not just about deciding if you want a yard with trees or a pool, or exterior wood or siding, rather, it is about what type of property can best serve your situation and goals. Which property type will make the right home for you? What are your personal, daily living needs and requirements? Here is a list of the most common property types available on the market today; perhaps understanding more about each can help you make a better decision as you search for your dream home.
Condominiums
A condominium is defined as the individual ownership of a building with access to common areas owned by all residents within the complex. Association fees must be paid to maintain, repair, and improve the common areas shared by residents, which typically include a pool, spa, tennis courts, walking paths, and more. Banks and lenders often finance condominiums at higher interest rates.
Condos are great for retirees since there is little upkeep, and in most markets, they cost less than single-family homes. Young singles and professionals do well in condos since most are located in high traffic areas close to jobs, entertainment and shopping. Keep in mind that there will be rules, so be sure you can live with them before you buy. Be sure you ask about the HOA fees, how much they are, when and how you pay them, and how often the fees are assessed.
Investment Properties
A property that is non-owner occupied, owned for the purpose of financial gain either through renting and/or appreciation. Even if the property does not generate income, if the owner does not occupy the home, it is considered an investment property. Investment properties include single-family residences and multi-unit properties. Multi-unit investment properties are among the most expensive to finance.
Manufactured Homes
Often referred to as “mobile homes” or “trailer parks”, these types of properties are constructed on a non-removable steel chassis which allows them to be transported. These homes are often located on leased land, such as in trailer parks and adhere to the Federal Construction Safety Standards Act (HUD/CODE).
On land a mobile will often cost less than half of what a similar-sized house costs, and will appreciate in value (because of the land). This can be a great way to get into home ownership. They do generally have lower-quality construction compared to houses, so be prepared for a few repairs and annoyances.
Modular Homes
Modular homes are similar to manufactured homes, though they adhere to building codes required by the specific state, county, and locality, and do not carry building or zoning regulations. They also differ from manufactured homes in that they don’t have an axle or frame, and must be transported on a flat-bed truck or like vehicle. Financing may be in the form of a personal property loan, and at a premium to mortgage loans.
Multi-Unit Properties
Multi-unit properties can be primary residences or investment properties. A 2-unit property (duplex) for example may be occupied by the owner in one unit, and a tenant in the other unit, defining it as a multi-unit primary residence. Or a 4-unit property may be solely occupied by tenants, defining it as a multi-unit investment property. Multi-unit properties carry additional financing adjustments to fee, more substantial for 3-4 unit properties.
Second Homes (Vacations Homes)
Second Homes, also known as “vacation homes” are residences typically found in recreation areas or resorts that serve as seasonal accommodation. These properties are in owned in addition to a primary residence, and can be condominiums, townhouses, or single-family residences. Vacation homes are common in ski resorts and near the beach, and may be rented out to other vacationers while not in use. Financing is more expensive than single-family residences, but less than investment properties.
Single-Family Residences
This is the most standard property type which is designed to support just one dwelling. This type of property does not include a common area as you’d find in a condominium complex and similar developments. They do not share walls with neighboring properties, and should have land separation from all sides of the property, as well as above and below. These are the cheapest properties to finance, as they are the norm.
Single-Family home is great for families with children. Whatever the style, the idea is to have room for everyone and preferably a yard for the kids to play in. One advantage of buying a basic three bedroom, two bathroom house is that this is the easiest type of home to sell. One disadvantage is that these "regular" homes can take a lot of work and money to maintain.
Townhouses
A single-family dwelling typically made up of two floors that shares side walls with nearly identical properties. It differs from a condominium in that no neighboring unit is above or below, and usually features an outdoor space in front and behind the property. It’s similar to a condominium in that tenants have access to a common area such as pool, spa, tennis courts and more. Many banks and lenders consider townhouses as a single-family residence, making mortgage financing more affordable.
Whether they're one, two or three stories tall, townhouses (also called townhomes) are typically vertical in design. Some even come with attached garages. They blend the privacy of a single-family home with the benefits of the exterior condo maintenance, which is usually done by the homeowners' association. Many townhouses are built in what are called planned unit developments (PUD), clustered communities that have areas for residential and commercial/retail use, and public areas such as schools, parks and the like.
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