Buying a Single-Family Home vs. Condos, Co-ops, and More


A single-family home has plenty of upsides: privacy, space and the freedom to make as many changes as you want (within the scope of zoning regulations, of course). But the single-family home life isn’t for everyone: Maybe you don’t want to be stuck mowing a lawn or figuring out who to call about a burst pipe. Single-family homes also tend to be more expensive than other kinds of real estate.

If you want to buy a house but aren’t sure you need a single-family home, you’ve got plenty of options. Here’s a quick primer on what’s out there. But first…

What is a single-family home?

When you’re looking at real estate, single-family home usually means a site-built, single-family detached home. Site-built — indicating the house was built at its location — distinguishes this type of home from modular and manufactured homes.

When you’re looking at real estate, single-family home usually means a site-built, detached home.

Detached means no common walls, no shared utilities, direct access to the outdoors — and maybe some outdoor space of your own. It could just be as little as a strip of land on each side of the house, but if you own the house, that piece of land is all yours.

Detached single-family homes are arguably the most common type of dwelling in the United States. According to U.S. Census data, more than 60% of residences in the country are one-unit detached homes. But that’s hardly all that’s out there.

Condos

A condominium, or condo, can be a more affordable alternative if you’re in an area where single-family homes are pricey. Condos in a multistory building are virtually indistinguishable from rental apartments, and side-by-side or detached condos may look like townhouses, but condos are a breed apart.

What distinguishes condos is what you own. When you buy a condo, you have sole ownership of the walls and everything inside the unit. You also have joint ownership of outdoor and shared spaces.

The joint ownership aspects of condo complexes are handled by the homeowners association. As a condo owner, you’ll pay a monthly HOA fee for all the maintenance, landscaping and other upkeep that goes on outside your unit.

Townhouses

The term townhouse might seem synonymous with condo, but there’s a key difference: In addition to the unit, you have sole ownership of your unit’s parcel of land and may be responsible for maintaining it, even if the townhouse is attached to an adjoining unit.

Co-ops

With a co-op (short for cooperative housing), instead of owning an individual unit, you’re a shareholder in the building or development. The amount of stock you have in the co-op, and what it’s worth, will depend on the value of your individual unit and how the co-op’s finances are structured. Though you might assume all co-ops are apartment buildings or condo complexes, any type of living situation, including a development of single-family homes, can be a co-op. A co-op is really a type of homeownership rather than a type of home.

Multifamily homes

What makes a building multifamily, and not just a couple of condos? It’s all about sharing: A multifamily home might have units that share utilities or storage space (like an attic or basement), or that simply aren’t completely divided. Multifamily homes are often duplexes, which have two units that are usually side-by-side and have one owner. Other times, you’ll see large, older houses that have been split into multifamily homes.

Since each unit has its own entry — and usually its own address — you’ll sometimes find what looks like half of a duplex for sale. That’s actually a “twin home,” which resembles a duplex. These share a wall and a plot of land, but are actually considered two separate lots. Sole ownership of multifamily homes is much more common, so if you’re looking to purchase, you’re more likely to be buying the entire property and renting out units.

Manufactured and mobile homes

The difference between a manufactured home and a mobile home? Age. On June 15, 1976, the Department of Housing and Urban Development instituted guidelines for the construction of these homes.

Technically, the term mobile home only refers to a movable home manufactured prior to HUD’s 1976 guidelines. A manufactured home is a movable home built after the “HUD code” implementation. Manufactured homes must meet the code (and have a tag that proves it).

Whether mobile or manufactured homes actually move or are placed on a foundation, both are built on a permanent chassis and can be towed. Though many types of homes (like prefab houses and even shipping container homes) are manufactured, since they aren’t built on a chassis, HUD does not consider these to be manufactured homes. Most lenders don’t, either.

Modular homes

Yes, modular homes are detached single-family homes (hey, so are manufactured homes!). The difference is the construction method: Rather than being built on-site from the ground up, modular homes are built in pieces that are brought to the location, joined and finished on-site. Though they’re constructed in a different way from traditional single-family homes, modular homes have to follow the same local building codes as site-built homes.



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