Single-Family Homes
This article will compare and contrast buying single-family homes versus condominium units, townhomes, and multi-family homes. All of these types of homes can be owner-occupant primary homes for first-time homebuyers and seasoned buyers. With so many housing choices out there, you can see why many people, especially first-time buyers, need clarification about which type of residence to buy.
Single-family homes remain the most popular dwelling for families in the United States. Most Americans prefer single-family homes over condos, townhomes, and multi-family units for their primary residence. However, in high density urban areas, developers are building townhomes and condominiums due to the scarcity of land.
Each type of dwelling – single-family, townhouses, condos, or multi-family homes – has pros and cons. Deciding between these homes cannot be easy, especially if you don’t know what you want. Luckily, we are to help you. In this article, we will compare and contrast these dwellings, helping you make a much more informed decision.
What Are Single-Family Homes?
Most people know single-family homes are free standing housing units built on a lot. Single-family homes are detached or stand-alone housing units on its own parcel. Size of the lot can vary from one-eight of an acre to dozens of acres. Typically, single-family homes sit single lots.
Single-family homes remain the most popular type of homes in America for families with children. Most first-time homebuyers prefer single-family homes due to privacy and sitting on its own lot.
Single-family homes don’t share any walls, ceilings, or floor with any other units. What this means is that the occupants have total control over the entire property Owners of single-family homes are responsible for any repairs and maintenance.
Types of Single-Family Homes
Single-family homes come in various architectural designs, sizes and features. Single-family homes vary in size from small bungalows to large multi-story homes. Single-family homes often come with amenities, including garages, backyards, or gardens. Many people consider single-family homes traditional style homes. Most homebuyers prefer single-family homes for their first home.
Single-family homes are the most popular type of housing in the nation. There are many style of single-family homes. There are single story, two and three story single-family home with and without basements. Prices range anywhere between ten to twenty thousand to million plus dollar homes. Due to be free standing with a lot, single-family homes are the most popular type of homes in the United States.
Single-family homes are most sought for by families with children who need a yard, playground, open space, and spacious interior. A single-family home is typically owned and occupied by a single family with children and possibly elderly in-laws. Single-family homes are generally independent and private, hence the name single-family properties.
What Are Townhomes?
What is a townhouse? Unlike a single-family home, a townhouse is a residential property attached to neighboring units. Townhomes are either attached in a row or a complex. Townhomes are also designed for and occupied by a single family. Compared to single-family properties, townhomes are usually smaller and come with a smaller outdoor space. Townhouses come on multiple floors.
Townhomes are becoming very popular among first-time homebuyers and retirees. The main reason townhomes are popular is due to the semi-privacy of being an individual unit but shared with an adjoining townhome but yet having the HOA do the maintenance of the common areas. Townhome communities have homeowners associations because the homeowners association manages the common areas such as landscaping, plowing, security, and maintaining swimming pools, club house, and other recreational centers.
Townhomes typically share a wall(s) with adjacent units. In addition, they have a more compact floor plan. Living spaces of townhomes are arranged on several levels. They also come with amenities like shared recreational facilities. Townhomes are usually belong to the management of a Homeowners Association (HOA). The management of the HOA is also responsible for any maintenance or repairs of common or shared areas.
What Are Condominiums?
In this paragraph, we will cover what are condominiums. A condo is a type of residential property where you find that the occupants individually own the individual units. However, the shared areas of the condo complex, including the lobbies, hallways, and other amenities, are owned and maintained by the owners of the condo units in the condo complex and managed by the condominium homeowners association.
Condominium communities all belong to a condo homeowners association (HOA). Board members of HOAs are owners of individual condos and are elected by owners of the condo community.
Condominium unit owners pay a monthly or annual fee to cover the maintenance and repairs of the common shared areas and recreational facilities. The board members of the condo homeowners associates decide on which third party vendors gets awarded the maintenance work done on these shared areas.
Warrantable vs Non-Warrantable Condos
Condos are very similar to apartments in that they are found in multi-unit buildings. Condos are either in high-rise or low-rise structures. There are two types of condominiums: Warrantable and non-warrantable condos.
HUD, VA, USDA, and Fannie Mae and Freddie Mac only allow warrantable condos. You cannot finance non-warrantable condominiums with FHA, VA, USDA, and conventional loans. Non-warrantable condos can be financed with non-QM and portfolio lenders.
Non-warrantable condos are condo communities where more than 51 percent of the units are investment condo owners. Warrantable condos are condo communities where over 51 percent of the residents are owners of the condominium units.
Type of Condominiums
Condos come in various styles and sizes, from studio apartments to large multi-bedroom units like regular apartments. The central amenities of the condos are fitness centers, pools, and outdoor spaces, all of which are shared between the units’ owners. While condos are similar to townhouses, there are critical differences between the two types of properties.
Many townhome communities are often referred to as condominium complexes. Some condo communities have single standing units shared by other units and look similar to a typical home units.
For starters, while condos are individually owned, townhouses share common walls. Also, townhouses give the owners a little more privacy compared to condos.
Differences Between Condos vs Townhomes
The differences between condos and small-family homes are pretty clear, with the only similarity being that they are designed for and occupied by a single family. So, suppose you are looking for a space where you will get more amenities and security, and maintain a low-maintenance lifestyle than in a single-family property, and a smaller space with more privacy than a townhouse. In that case, a condominium should be a good option.
What Is a Multi-Family Home?
A multi-family home is a two to four unit residential housing building. A multi-family residence or a multi-dwelling unit is a type of residential property that comes in two or more separate living units within the same building or complex. These units can then be rented to multiple families, generating rental income. This is the reason why they are popular among landlords and investors. The properties range from small duplexes to large apartment buildings. Multi-Family housing units are most common in urban, suburban areas. Multi-family units can be found even some rural areas.
Type of Multi-Family Homes
In terms of architectural styles and designs, you will find multi-family homes in various units, including studio apartments and one to multiple-bedroom houses. Multi-family homes usually come with shared areas and amenities such as laundry areas, lobbies, hallways, other recreational facilities, and playgrounds. In terms of maintenance and repairs, the owner of the home is the one who is responsible. So if you are looking for an investment property large enough to live in; and want to rent out all the other units, a multi-family property is an ideal option.
What Type of Home Is Best For Me and My Family?
In this section, we will cover what you need to consider when deciding the type of property to buy. Deciding between a single-family home, townhouse, condo, or multi-family property can be challenging. This holds true especially if you don’t know exactly what you want. Luckily, we are here. The thing is, there are a number of factors that you will need to consider before you finally settle on one. These factors include the following;
Location Consideration For Homebuyers
This is the most crucial factor that you will have to figure out. The property’s location can not only affect your lifestyle, but it can also impact the property’s value. So, whichever type of property you choose, you better ensure that it is in an area suitable for you and your family. Consider factors such as proximity to work, schools, and all the other basic amenities.
Down Payment Requirement For First-Time Homebuyers
Your budget will also be a major factor in deciding which of the four types of properties you should choose. Single-family homes are the most expensive since they are sold together with the land they sit on. Condos and multi-family homes are a bit cheaper.
The biggest hurdle for first-time homebuyers is coming up with the down payment and closing costs. You do not need a twenty percent down payment to purchase a home. To qualify for an FHA loan, you need a 3,5% down payment. VA and USDA loans do not require a down payment. To buy a home with a conventional loan, you need a three to five percent down payment.
So, when selecting the right one for you, of course, you should go for the one you can afford, both the buying price and maintenance, repairs, and association fees.
Responsibility of a New Homeowner
When it comes to maintenance, of all the properties, single-family homes require the most maintenance. The owner is the one solely responsible for all the repairs and upkeep. Condos and townhouses usually require much less maintenance work. Whenever it is needed, the HOA is the one responsible for it.
Multi-family homes require even lesser maintenance. Whenever required, the owner is the one who is responsible. With that said, you can select based on what you would like. Single-family homes are the perfect option if you want to be responsible for everything. If you don’t want any responsibilities, a multi-family home may be a good option.
What Type of Property Is Best To Invest In?
This is the other crucial factor to consider when deciding the type of property to buy. Single-family homes offer the most privacy and autonomy, although it does so at a high cost. As for condos and townhouses, they are usually part of a larger complex, offering less privacy.
The best type of property that is best in are single-family homes. Single-family homes have the best resale value. Statistics show single-family homes appreciate faster over time versus condos and townhomes.
Multi-families properties offer the least privacy and autonomy. With that said, it is up to you to decide the kind of lifestyle you to adopt in your new home. Just weigh each property type’s pros and cons and select the one that perfectly aligns with your lifestyle.
Smart Goals For Buying a House
What are long term goals of most homebuyers? Are they buying a starter home? How long are they planning in living in their first home purchase? What is your long-term plan? Are you planning to stay for a long time in the property. Or is it just an investment for the time being?
Homebuyers can buy a two-to-four unit multi-family home with a 3.5% down payment FHA loan. They can live in one unit and rent out the other unit. Buying a two-to-four unit multi-family home as your first home is an excellent investment for the future.
You will have to figure out this first, as it will helped determine the type of property to buy. In this regard, single-family homes are a better investment option for the long term than other types of properties. But a multi-family home should be the better option if you want an investment from which you can earn rental income. Townhouses and condos are more for the short term.
What Type of Property Is Best For First-Time Homebuyers
Ultimately, the decision on the type of property to buy boils down to the cost of the property, convenience, and your lifestyle. If you are a first-time homeowner with little or no experience in home ownership and maintenance, it may be much more beneficial to you if you start in a condo or a townhouse.
Homeowners who purchased a multi-family home as their first home, they can qualify to purchase another single-family home as a second home if they are outgrowing the unit in the multi-family home. They can keep the multi-family home as a rental.
Many first-time homebuyers purchase a condo or townhome as their first home. Condos and townhomes costs less than single-family homes. You can can upgrade to a single-family home later after learning how to take care of a home or what it takes to take care of a home. If you are an experienced homeowner looking for more space and never having to deal with HOAs, then a single-family home would be your perfect option. In the end, you need to weigh the pros and cons of each type of property to see the option that perfectly matches your needs. Take your time!