Types of Residential Investment Properties

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When most people think of a residential property, they visualize their family home. Once they purchase a family home or inherit one, they believe they have no business looking at the available residential properties. A residential investment property is, nonetheless, a lucrative asset for prudent investors. There are millions of people looking to rent or buy homes, and having one or two residential properties for rent or sale is a surefire method of making money.

Most people will only think of condo in Ortigas when thinking of a residential investment property. This is a single unit within a large community or building that shares walls with other units and is governed by a homeowners’ association. Condominiums, as they are also known, are popular in high-density urban areas and come with minimal upkeep costs and shared amenities like pools, guys, and lounge areas. They are, however, not very private and limit the types of remodels your tenant or homebuyer can have.

Other than condos here are the other residential investment properties you should add to your portfolio.

Single-Family Home

This is a house built on a single lot and has no shared walls with neighboring properties. The house might have a detached or attached garage. Single-family homes offer optimal space and privacy and often have back and front yards. They also have a higher resale value compared to townhouses and condos. The maintenance of single-family homes is nonetheless expensive.

Townhouse

These are hybrids of single-family homes and condos. Townhouses generally feature several floors with shared walls, small yard space, and sometimes a rooftop deck. Though bigger than condos, they are smaller compared to single-family homes. Some come with joint maintenance or HOA agreements that will share the maintenance expenses making them inexpensive to maintain. Townhouses are, however, not as private as single-family homes and do not have common amenities like pools or gyms.

Co-op

Cooperatives have a slightly different form of property ownership. While in condos, you will own the space your unit occupies, in a co-op, you will own the multi-story building together with other tenants. To this end, you will often undergo an interview to determine your eligibility to possess the unit. Co-ops are less expensive to buy and maintain compared to condos. Unfortunately, it is not so easy to get a mortgage for a co-op. Moreover, if one tenant does not service his/her mortgage, the lender can foreclose the whole building since you share financial responsibility.

Multi-Family Homes

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These are generally large homes that have been partitioned into different units. Multi-family homes usually are multi-story and rowhouse-style buildings and can range from duplexes to fourplexes. They can have one entrance for all units or separate entrances to different units. Some property owners opt to occupy one unit then rent the rest. You will, however, handle the maintenance costs of your entire multi-family home, and the living conditions are not so private.

Most property investors opt for commercial properties because they accommodate a high number of tenants. The above residential investment properties nonetheless have a guaranteed occupancy. The profits you will make from your renting or sale primarily depend on the location of your property and the prevailing market. Did you know you can invest in real estate without the hassle of being a landlord? Check out a comprehensive review of Ark7.

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15 thoughts on “Types of Residential Investment Properties

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  6. Your insights on residential investment properties are truly eye-opening. It’s refreshing to see you challenge the common misconception that a family home is the only viable residential option. Your breakdown of different property types, from condos to multi-family homes, provides a clear understanding of the diverse opportunities available. Your emphasis on considering factors like privacy, maintenance costs, and resale value is invaluable for anyone venturing into real estate investment.

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