What is the best type of property to buy? Pros and Cons of each.

Sammamish Mortgage
Post Date: February 11, 2021Updated: September 17, 2021

You’ve finally reached the point in your life when you’re ready to buy a home. What type of home should you choose? Single-family detached residences, condos, townhomes, and multi-family units are all options for homebuyers. Here are the pros and cons of each.

Single-Family Detached Home

This is the traditional house with a yard and a picket fence. What makes this type of home so attractive, and what are the pitfalls?

Pros

There are many advantages to traditional home ownership, including:

  • You own the land, the home, and everything else on the property
  • Traditional home loans are typically the easiest to qualify for
  • You’ll have the widest range of home loans to choose from
  • Customizing home design and decor are up to you
  • You’ll have some space for neighbors

Cons

On the downside, a “regular house” can cause some headaches, such as:

  • You’re 100% responsible for home upkeep, maintenance, and repairs, inside and out
  • You can end up in the suburbs far from amenities and city lifestyle
  • It might be difficult to find a smaller house in good condition

Condos

It’s like apartment living, except you own the apartment. Here’s why people love and hate condo life:

Pros

Condo dwellers tend to be enamored with the idea of stress free home ownership:

  • You never have to worry if the roof is damaged or the grass needs cutting
  • Insurance can be cheaper for a condo than a house
  • You might have access to extra amenities, like a community building, a gym, or a pool

Cons

However, there are drawbacks to living in condos and it’s not always a paradise:

  • Homeowners association (HOA) fees can be stiff
  • Poorly managed condos can mean hefty out of pocket costs
  • Condos can be harder to sell when you’re ready to move on
  • Building renovations or repairs can result in large assessments that must be paid by the owners in the condo.

Townhomes

If you want something between a house and a condominium, a townhouse could be your best bet.

Pros

Townhomes deliver the full homeowner experience with the community feel of a condo complex, with these added perks:

  • You’ll have neighbors to each side of you, but none above or below you
  • Square footage can be more than a condo with multi-level flexibility
  • Small footprint townhouses are accessible in areas where real estate is costly

Cons

Townhomes can be a non-option if you love lots of space and few neighbors and hate HOAs:

  • While you may have a yard, it’s not likely to be much bigger than a postage stamp
  • You’ll still have HOA fees, even though you own your entire property
  • Townhomes aren’t necessarily cheaper than a house, it depends on the area

Multi-family Residences

Finally, you can try house hacking with a multi-family property if you want to invest real estate, have a place to live, and get most of your mortgage paid for you:

Pros

  • A multi-family property has two to four units so you can live in one and rent out the rest
  • You can often collect rents that cover your mortgage for the entire property
  • You’ll still be able to qualify for primary residence interest rates if you live in one unit

Cons

  • You may not enjoy being a landlord, and your tenants will always be right there
  • If you can find tenants, vacants units can be a drain instead of a revenue source
  • Multi-family properties appreciate in value more slowly than single-family homes

Making the decision about what kind of property to purchase will largely depend on your personal lifestyle habits and preferences. Your Loan Officer can help you with loan types and structure to help you find the mortgage solution that is best for your final choice.

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