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Pros and cons of different types of homes

In general, though, they break down into three categories: Single-family homes (including manufactured houses, modular homes and PUDs) Condominiums, co-ops or townhomes Multi-unit housing (duplexes, triplexes and fourplexes) Different types of homes are easier to buy and appreciate at different rates. But it makes sense to break them down into seven categories: Single family residence Condo/co-op Townhome Zero lot line Planned unit development (PUD) home Manufactured Modular/pre-fab Multi-unit Each category has characteristics that make them more or less attractive to a purchaser, depending on that person’s needs. Pros Someone else is going to clean, repair and maintain the common areas, including the grounds Many condos and co-ops provide extra amenities, including pools, gyms and 24-hour security/door staff They typically have lower prices than an equivalent single-family residence, though there are exceptions They’re often located where land is at a premium, so you may find yourself with a sea view or in a prime downtown location where a single-family residence would be prohibitively expensive Many condo developments and co-ops have a real sense of community and may help you make friends quickly However, some of those pros have flip-side cons. Related: Townhomes, condos and more (how property type affects your mortgage) Most townhomes share walls with two neighbors. Cons You’ll be sharing a party wall with at least one neighbor and usually two. Depending on your choice of zero-lot-line home, including its ownership model, almost all the pros and cons listed under the different types of homes above could apply. So you may well find single-family residences, apartment-style condos, townhomes and zero-lot-line homes all within the same PUD. Pros Plenty of attractive amenities Communal facilities and spaces maintained by the HOA or condo management Larger PUDS often have restaurants, bars, and shopping and medical facilities on site Selection of types of home This is a lifestyle choice that can deliver convenience and amazing amenities with a real community “feel.” Cons None of this comes cheaply: watch out for high HOA/condo fees You’ll be paying for the upkeep of amenities, even if you don’t use them Your mortgage lender will want to know you’re buying within a PUD Individualists may find HOA rules and that community “feel” oppressive Make sure you’re going to enjoy this lifestyle and that you’re prepared to pay for it. Multi-unit homes Multi-unit homes come with two-to-four units on one property. Pros Multi-unit housing can be a great option for multi-generational families who want to live together, but not right on top of each other You can live in one unit and get rental income for the others Most lenders allow you to finance them as primary homes as long as you live in one unit Many programs (like FHA) allow you to finance a higher amount with a multi-unit property Cons Multi-unit homes don’t generally appreciate as fast as single-family housing Fees for financing two-to-four unit homes are higher Qualifying for a home loan may be more difficult, depending on the lender and program You may not like your neighbors or being a landlord Related: Buy a duplex, tri-plex or four-plex and let your tenants pay your mortgage Different types of homes Don’t worry too much about choosing your next home.

What Is Ownership Interest?