All About Property Types
An early step in the homebuying process is narrowing down what type of home might be right for you.
Single-family homes are the most common target property for first-time homeowners. There are two options: a newly constructed house or an older home in an already established neighborhood. Both new construction and older homes offer advantages to first-time buyers. Older homes may be roomier, more affordable, and better located. A new home likely has a more efficient heating system, better insulation, and lower maintenance costs, since everything is brand new.
A condominium is a single-unit in a larger building or property that has multiple units. Benefits of condo ownership include low maintenance (costs and responsibilities for repairing common items, like roofs and heating systems, are shared) and many of the freedoms of apartment living. Remember, though, that along with your private space, you will also share common areas with the owners of other condominiums in your property.
As a condo owner, you may be asked or may wish to serve on the association board—the group that oversees the joint operations of the condominium property (sometimes with the support of a property management company). This involves overseeing the collection of fees, upkeep of the grounds, maintaining cash reserves, and managing both emergency and scheduled repairs.
Purchasing a 2- to 4-unit property provides you with both an investment property and a personal residence. Along with the possible tax and income advantages of multifamily homes come the added responsibilities of a landlord, such as tenant search and selection, leases, security deposit procedures, evictions and emergency repairs.
During your search for a home, you are sure to find many houses that can be described as fixer uppers—generally older homes in need of updates and repair. These homes are often less expensive to purchase and frequently in older, more established neighborhoods, but have suffered from neglect over a long period of time.
If you decide that a fixer-upper is for you, be prepared for the numerous costs involved in rehabilitation work. Once work begins, you may uncover additional issues. Rehabilitation costs can rise quickly and significantly, as can the time needed to get the house in good working order.
If you decide on a fixer-upper, have a contractor or home inspector detail the extent of rehabilitation work, and estimate the costs. Do this before you make your offer on the home. The amount it will cost to repair the property will impact the price you offer to pay for the house.