Different Residential Building Types
Learn the difference between single-family homes, condos, and townhouses, and decide which is right for you.
When deciding on the type of home you’d like to purchase, it’s important to know what’s available and envision how your lifestyle and needs might evolve in the next five to ten years.
Below is a handy guide to the characteristics, benefits and drawbacks of each type of residential building.
Single family homes (often abbreviated as SFH) are homes built on a single lot, with no shared walls. Sometimes there’s a garage, attached or detached.
Single-family homes tend to offer more privacy and space than other types of homes, and frequently come with private front and back yards. Since you don’t share the property with anyone else, you are free to express yourself with any type of home design you choose. You’ll also have a more reliable resell value than condos and townhomes.
This home type generally requires a lot more maintenance, and all of the cost for that falls on the shoulders of the homeowner. With condos and townhomes, you share the costs involved with yard maintenance, plumbing, roofing and building amenities.
Condominiums (or condos for short) are single units within a larger building or community. Condos share a wall or two with other units, and generally come with homeowners’ associations (HOAs), which require the residents to pay monthly or yearly dues. They are popular in urban, high-density areas, where there are many restaurants and shops.
There is minimal responsibility on the homeowner’s part to contribute to maintenance and upkeep. For example, if the roof goes out, you share the costs with other residents instead of paying for the whole thing yourself. Additionally, some condos offer gyms, lounge areas, pools and other amenities that you might not be able to afford or have space for in a single-family home.
Condo homeowners’ associations often limit the types of remodeling you can do, and there can be pet and rental restrictions as well. HOAs want uniformity and safety; you don’t want one homeowner replacing doors and windows if they’re not to a high standard, or safely installed! In addition, because you share a space with others, there’s not as much privacy, and you need to be extra cautious of disturbing your neighbors because they are so close.
Townhouses are a hybrid between a condo and a single-family home. They are often multiple floors, with one or two shared walls, and some have a small yard space or rooftop deck. They’re generally larger than a condo, but smaller than a single-family home.
Townhomes often have more privacy than a condo might afford. Some have HOAs or joint maintenance agreements to share upkeep costs. They tend to be more affordable than a single-family home.
Townhomes don’t usually have shared amenities like a gym or a pool, but they’re not as private as a single-family home.
Cooperatives, or co-ops, are a slightly different way of holding a title to a shared building. With a condo, you own the space within your unit, but with a co-op, everyone owns the building together. Because of the shared responsibility, there’s often an interview process to become part of the community.
Co-op owners usually take on maintenance as a community, so they tend to have lower HOA dues. They also tend to be less expensive than comparable condos.
You share financial responsibility of the whole building with your neighbors, which means if someone stops paying their mortgage on a co-op, the bank can foreclose on the whole building. It can be more difficult to get a loan for a co-op than a condo; most require more money down, and some banks won’t support it.
Multi-family homes are the least common type of residential building. They are essentially a home that has been turned into two or more units. They can be rowhouse-style or have multiple floors, and range in size from a duplex to a four-plex; anything more than four units is considered commercial. Some multi-family homes have a separate entrance for each unit, while some share a main entrance. The distinction between multi-family units and condos is that the units can’t be purchased individually; there’s one owner for the whole building.
Multi-family homes are ideal for those looking for an investment property: many decide to live in one unit, and rent out the others for income, or simply rent out all units. They are also a great option for multi-generational households; they allow family members to live in the same building but have their own unit.
Multi-family units are a hybrid between a single-family home and a condo. The units tend to be smaller than single-family homes, and less private. If you’re renting one, the maintenance costs go to the landlord, but if you own one, you’re bearing all the costs for maintenance plus the time commitment of finding renters.
Just land, no home of any type for sale.
The sky is the limit; you can build whatever type of residential home you’d like, or raise crops or animals (within local restrictions).
Land tends to require a much larger down payment, and fewer lenders are available for someone looking to finance a land purchase. Why? Banks like to know that there’s going to be someone living on the land, and that it will be improved. It’s easier to know what a property is going to be used for when you see a structure sitting on it. Also, it may not come with utility hookups, so you’re responsible for bringing gas, water, plumbing, and electricity to the land before building a structure. In addition, you’ll have to get permits before you build, which can take months or years, depending on the situation.