Types of Residential Real Estates and the Pros & Cons of Investing in Each Type

Posted by Andrew Paul on August 21st, 2018

Investors all over the world adopt different investment strategies depending upon the local market conditions, their financial status, and their personal investment goals. But irrespective of the difference in their approach, most of them have a residential real estate investment in their portfolio, or at least they intend to make one in the future. That’s because residential real estate investments offer higher ROI, and they can also be rented out to generate a steady stream of income. If you have missed the bus, don’t worry because it’s never too late to invest in real estate. But before you look for property for sale in Antalyaor in any other city, you must decide what residential property type best meets your goals. To help, in this post, we list the pros and cons of different types of residential properties. Keep reading to learn more.

Type 1 - Single family home

Single-family homes, popularly known as SFH are built on small, single plots. There is no shared wall. However, some SFHs have an attached or detached garage. SFHs have open space and are not attached to any structure.  

Pros

• Offer more privacy as compared to other types of residential properties.
• More reliable resale value as compared to condos and townhomes.
• Since there is no sharing of space with other properties, the homeowner is free to choose the home design.

Cons

• High maintenance.
• The homeowner has to bear all repair, maintenance, and other expenses.

Type 2 - Multifamily home

A multi-family home is a collection of two or more units. Multifamily properties can be row house style or include multiple floors. The units comprising a multifamily home cannot be purchased separately, which means there can only be one owner. Many multifamily homes have a separate entrance for every unit, while some have a common entrance.

Pros

• An ideal investment property.
• Helps kill two birds with one stone (the owner can move into one unit when renting out other units).

Cons

• Smaller units as compared to single-family homes.
• The owner has to bear the aggregate maintenance cost of all units.
• Finding renters for all units to ensure high occupancy rates can be a problem.

Type 3 - Condominium

Condominium or Condos, as they are popularly referred to, are small units within big residential buildings. Popular in urban areas, condos share one or more walls with other units.

Pros

• Shared responsibility for maintenance and repairs with other residents.
• Most condos have various facilities such as a gym, swimming pool, and recreation center.

Cons

• Restrictions on remodeling.
• Lack of privacy.

Final Few Words

When deciding which type of residential property to buy, consider these pros and cons. Some other types of residential properties worth your consideration are townhouses and co-ops.