The 3 Most Common Residential Home Types
Are you new to real estate? To calm your confusion, here are the 3 most common residential home types.
In 2015, Americans spent over $535 billion on rent.
That's 535 billion dollars going to property owners--and that's just in one year.
In other words, now is the time for you to get into residential home real estate investing.
But it can be hard to know where to start. That's why we've compiled information on the 3 most common types of residential homes with a list of pros and cons for each.
Let's get started!
1. Single-Family Residential Home
This is the most straightforward and also most common home type. Basically, a single-family home is a standalone house built for one family.
Often abbreviated SFH, these homes are built on their own lot, not sharing any walls with another building.
And depending on the property, single-family homes commonly have garages, either attached or detached.
A huge benefit of a single family home is a private front and backyard. Additionally, you have much more control over the interior and exterior design.
What's more is that single-family homes have been and still are the most common type of residential property, accounting for more than 60% of all U.S. homes.
The biggest con, however, is the cost of maintenance. And all of these costs fall on the owner.
2. Multi-Family Home
If you're an investor, a multi-family home can be a very lucrative property to own.
Essentially, a multi-family home is any residential home that has been turned into two or more units, ranging from duplexes to fourplexes.
However, a property with more than four units is considered a commercial property.
These units can be rambler style or have multiple floors and can also have one entrance or separate entrances for each unit.
As you can tell, there are a lot of options when it comes to multi-family homes.
One of the largest benefits of a multi-family home is the investment potential. In one property, you could reap monthly rental income from up to four different renters.
But we also need to address the drawbacks here. From a renter's perspective, these units tend to be less private as well as smaller than a typical single family home.
And as the owner, the cost of maintenance as well as the task of finding renters both fall on your shoulders.
But at the end of the day, multi-family homes are a terrific investment for two reasons: 1) the value of the property usually increases over time and 2) the net operating income of the property usually increases as well through rent increases and effective property management.
In other words, a great ROI for you!
Last but not least are townhomes.
What's the difference here, you wonder? Let me explain.
Townhomes are essentially a cross between a single-family home and a condo.
In many cases, they have multiple floors and often include a backyard area or deck. They always share at least one wall with another townhome.
Why are these so popular?
Well, for many reasons. Consumers lean towards townhomes because they provide the benefits of a single-family home (like a yard and multiple floors) while being more affordable.
They also provide more privacy than a typical condo, but a downside is there usually aren't typical condo amenities like a community gym or pool.
If you're looking at getting into residential home real estate investing, you still probably have a lot of questions.
Well, great news--we are here to help!
From general tips to specific property information, contact our team of experts to get started today.