For any potential homebuyer, choosing the right type of home is one of the most important decisions they’ll make. After all, buying a home is a considerable investment, and there are several options, including single-family homes, condos, townhouses, fixer-uppers, build your own, and foreclosures. Choosing the right type of home depends on a home buyer’s needs, budget, and more. Below, we’ll touch on the different types of homes a person can buy, what they may cost, advantages and disadvantages, and everything else potential homebuyers should know.
Before buying a home, it’s best to recognize the different types available and what option works best for a specific situation. Not all homes are built the same, and there are advantages and disadvantages to each kind.
Single Family Home
Should you buy a single-family residence? A single-family home (SFH) is perfect for what the name implies: a single-family. These homes can be one story, or more, and contain numerous bedrooms. Single-family homes often provide more space and a yard, but they can come at a higher price. While the cost will vary per state, county, and even city, the United States median home price in June 2020 was about $275,000.
- Extra room for a family to grow and do more things
- More freedom in locations and communities without a homeowners association
- More privacy and space away from the neighboring homes
- More labor-intensive to fix certain items and maintain the larger home
- Usually more expensive than other homes
Condos, or condominiums, are similar to many apartments because they’re much smaller than a single-family home and typically attached to other condos in the same area. These are perfect home types for those looking just to start a family, couples buying their first home, or older couples looking to remove the problems of empty nest syndrome. They are typically part of a larger community, which comes with numerous benefits and some disadvantages. The average cost for a condo in the United States as of 2019 was $249,500. Whether you should buy a condo really just depends on how much mortgage you can afford, how much space you need, your location, and what use will you get from the property.
- Condos typically require less exterior maintenance because the community homeowners association handles much of the exterior and commonplace maintenance
- Condominiums come with numerous amenities in the community, often having a pool and a fitness center, as well as on-site security
- Condos are usually more affordable than a single-family home
- Condos typically have homeowners association fees that cover many of the amenities that come with this type of community
- Living in a condo means the homeowner has less privacy because they’re closer to neighbors
- Condos may not grow in value like single-family homes, meaning they are more challenging to sell and may not provide the owner with as much profit in return
Townhomes are the right balance for many who want a mix between a single-family home’s privacy and a condo’s affordability. Buying a townhouse is generally less expensive than an SFH, and ranges significantly in price, with some of the lower-end townhomes sitting around $100,000 and some of the higher-end townhouses over $300,000. The average median cost in the United States as of 2020 was $166,500, making it a very attractive offer for those who don’t mind the disadvantages of owning one.
- Townhouses, like condos, require less maintenance on your part because they are part of a homeowners association that takes care of all the external work, as well as the commonplaces in the community.
- Townhouses are typically in prime locations and give homebuyers plenty of options when looking for the right community for them.
- There are often strong communities around townhouses, with many neighbors close enough to grow relationships, but still provide more privacy than condos.
- Buying a townhouse provides minimal options when updating a home, as homeowners associations often dictate what can be done.
- Townhouses still have less privacy than single-family homes because they’re closer together but have more space than condos.
- Like condos, townhouses have a lower resale value, so it becomes more difficult to get as much profit as most would like out of a townhome.
Fixer-uppers can be a risky investment, but it can be perfect for those with the right budget. Many people buy a fixer-upper when they want to remodel as much as possible and make the home exactly how they want it. However, for those who cannot afford the cost of fixing up the house, it may not be the best option to look at.
- A fixer-upper allows the homeowner to make choices that help them create the home exactly how they want
- This type of home provides a low start-up cost and can typically be had for much less than other types of homes
- Buying a fixer-upper outside of a homeowners association means no limits for customization and freedom
- This type of house has several expenses that arise after the original purchase as the homeowner tries to fix problems and remodel parts of the home
- There may be an issue with resale value if the house is not up to code or it’s not up to standard
Build Your Own
Building your own home can be expensive, especially when you consider what to add within it, materials to use, where the house is built, and more. It can be costly to build a house when considering certain materials and permits. It’s not for everyone, but for those who choose to make their own home, advantages include freedom to create what they want and ensuring things are exactly how they want it with no need to remodel.
Foreclosure options often arise when one homeowner cannot make payments on their home any further. The bank that owns the loan on the house will take possession of it, and it may be sold to someone else. They often come at a less expensive price. But the buying process for a foreclosure can be much different, and it’s best to work with someone who understands this type of situation.
What type of home should you buy?
As you can see, the analysis isn’t always straightforward. There are many factors involved in answering this should. Whether it’s budget, location, purpose, or even size, the decision of which home type is best for you needs to be thought out as thoroughly as possible before contacting your realtor.