House, Condo, Townhouse or Multi-Family?

For many people the answer to that question is easy.  For others, a house, condo, townhouse or multi-family has distinct advantages and disadvantages.

The Single Family Home:

              This is what most people strive to own.  The single family home provides your own private home on your own private piece of land.  Compared to the other types of properties it provides the most privacy and the most value.  The single family home tends to appreciate faster than other types of homes simply because more people want to buy it.  So, from a supply and demand perspective, it is the best investment but it will also most likely be the most expensive.

              Advantages: your own private home on your own private piece of land, the most appreciation, the best overall investment

              Disadvantages: complete maintenance responsibilities inside and out

The Condo or Townhouse:

              Many times these terms are used synonymously but there are some important differences:

Condo:  Usually one floor, smaller than a townhouse, usually 1-2 bedrooms and one bath, usually many units in a building of three or more floors, price is usually less expensive than a townhouse

Townhouse:  Usually multi-level, larger than a condo, usually 2 or more bedrooms with multi baths, units tend to be side-by-side with 2-10 per building, price is usually more expensive than a condo

              Advantages: low maintenance responsibilities, no exterior or yard care expenses or maintenance responsibilities, deeded or reserved off-street parking, can hang on to it as an investment and rent it out

              Disadvantages: monthly condo fee in addition to your monthly mortgage payment, no yard to call your own, shared common areas, close neighbors, group maintenance decisions

The Owner Occupied Multi-Family:

              A multi-family purchase can range from a building with 2 units to a building with many, many units.  Buying a multi-family is similar to a single family in that you own the building and the land yet similar to a condo/townhouse in that you only occupy a small section or unit of that building.

              Owning a multi-family also means that you will most likely have tenants which will make you, in turn, a landlord.  Being a landlord is not for everyone.  Landlords are not only responsible for collecting rents but are also responsible for building upkeep, building maintenance, finding new tenants and for handling the demands and needs of those tenants.  As an owner occupant of your multi-family you share your day-to-day life with your tenants.

              Advantages:  you own your own building and your own land, you will have tenants that rent from you and help pay the mortgage, usually has a driveway for off-street parking, can hang on to it as an investment and rent out the entire building

              Disadvantages:  the building is not just occupied by you it is also occupied by your tenants, your tenants are very close neighbors, if your tenants don’t pay the rent you’re responsible for collection and the possibility of also having to evict them, land area is usually limited and shared, off-street driveway parking is usually shared, an assorted number of landlord responsibilities