The first decision you’ll make when you start house hunting is what type of home you want to hunt for.
There are four main types: single-family residence (SFR), condominium, townhome, and multi-unit property.
Let’s review them.
Single Family Residence
Single-family homes, also referred to as single-family residences or SFRs, are the most common option among home buyers.
A single-family residence is a standalone home intended for one family to live in, located on a piece of land. When you buy the home, you also purchase the land the home is built on. This gives you the classic front and back yard situation.
If you’ve ever seen imagery of that storybook-looking house with the white picket fence, that’s a single-family home.
Condominium
A condominium, or condo, is a living unit within a larger building or complex. In many ways, it is similar to an apartment, except you own the unit you live in.
The outside walls, landscaping, and common areas within the building – such as fitness areas, party rooms, hallways, and elevators – are collectively owned by the building’s residents.
Because the common areas must be maintained, condo ownership comes with a monthly homeowner’s association (HOA) fee. You pay these dues to the HOA, which uses the money to manage and maintain the complex for you.
Townhome
Townhomes, like condos, are part of a planned community with common areas and a homeowner’s association.
The big difference is that a townhome is typically only attached to another unit on one or two sides, with no units above or below.
One bonus of a townhome is that it may include some personal outdoor space, such as a small patio, a front porch, or a yard. Like condos, the HOA will manage the exterior maintenance and landscaping outside of your personal space.
Multi-Unit Property
Multi-unit, or multi-family, properties have more than one unit built on a piece of land.
Much like a single-family home, you buy both the land and the home. Only this time you’d buying two, three, or four units to live in one and rent out the others.
Owning a multi-unit property as a first-time homebuyer is unconventional, and it’s a lot to take on, but it could be a fantastic investment opportunity.
If you want your first home to make you both a homeowner and a landlord, this is the option for you.
