Why Residential Property Type Matters
Residential real estate categories can look similar from the street, but they differ in how you live in them, how you maintain them, what you truly “own,” and what risks show up when you try to rent or resell. This chapter compares common residential types using the same checklist each time so you can quickly evaluate function and risk.
A quick comparison checklist (use this on any listing)
- Typical occupant: mostly owner-occupied, mostly renter-occupied, or mixed?
- Shared elements: do you share walls, roofs, hallways, land, parking, utilities?
- Common fees: HOA/condo/co-op fees? what do they cover and what can they increase?
- Maintenance responsibilities: what is “yours” vs. the association/landlord?
- Resale considerations: financing limits, buyer pool, rules on rentals, special assessments, condition issues.
Single-Family Home (Detached)
Concept: A standalone dwelling on its own lot (even if lots are small). You typically own the building and the land beneath it.
| Category | What to expect |
|---|---|
| Typical occupant | Often owner-occupied; can be rented as a single unit. |
| Shared elements | Usually none (no shared walls). Utilities are typically separate. |
| Common fees | Sometimes an HOA in planned communities; otherwise none. |
| Maintenance responsibilities | Owner handles nearly everything: roof, exterior, yard, driveway, systems. |
| Resale considerations | Broad buyer pool; condition and location drive value; fewer rule-based restrictions than condos/co-ops. |
Practical risk notes
- Budget risk: big-ticket items (roof, HVAC, sewer line) are on you.
- Insurance: you insure structure and liability; premiums can vary by hazards.
- Rental risk: if used as a rental, vacancy means 100% income loss (only one unit).
Step-by-step: what to verify on a single-family listing
- Lot and boundaries: confirm lot size, fences, easements, shared driveways.
- Systems age: roof, HVAC, water heater, electrical panel, plumbing material.
- Water management: grading, gutters, basement/crawlspace moisture.
- HOA (if any): rules on parking, exterior changes, rentals.
Condominium (Condo)
Concept: You own the interior of a unit and a shared interest in common areas. The association maintains common elements and enforces rules.
| Category | What to expect |
|---|---|
| Typical occupant | Mixed: owner-occupants and renters (varies by building rules and investor share). |
| Shared elements | Hallways, roof, exterior walls, elevators, amenities, sometimes plumbing stacks and HVAC components. |
| Common fees | Condo/HOA dues for common maintenance, insurance on common elements, reserves; may include some utilities. |
| Maintenance responsibilities | Owner: interior finishes and in-unit items (varies). Association: exterior/common systems. |
| Resale considerations | Financing can depend on building health (reserves, litigation, owner-occupancy ratio). Rental caps and pet rules affect buyer pool. |
Practical risk notes
- Fee risk: dues can rise; special assessments can occur for major repairs (roof, façade, elevators).
- Rule risk: restrictions on renting, renovations, pets, short-term rentals.
- Marketability: some lenders avoid buildings with high investor concentration or weak reserves.
Step-by-step: how to evaluate a condo beyond the unit
- Read the rules: rental limits, pet limits, move-in fees, renovation approvals.
- Review financials: budget, reserve study (if available), delinquency rate.
- Ask about assessments: recent and planned projects; insurance claims history.
- Confirm what dues include: water, trash, heat, parking, amenities.
Townhome (Townhouse)
Concept: A multi-level home sharing one or more walls with neighbors. Ownership can be “fee simple” (you own the structure and land) or “condo-style” (you own the interior with shared exterior responsibility). Listings may use “townhome” for both, so confirm the legal form.
| Category | What to expect |
|---|---|
| Typical occupant | Often owner-occupied; can be rented (rules vary if HOA exists). |
| Shared elements | Shared walls; sometimes shared roofs, driveways, parking courts, private roads. |
| Common fees | Often HOA dues for landscaping, private roads, exterior items (varies widely). |
| Maintenance responsibilities | Ranges from “you maintain everything” to “HOA maintains exterior/roof.” |
| Resale considerations | Buyer pool between condo and single-family; rules/fees influence value; noise/privacy considerations. |
Practical risk notes
- Ambiguity risk: townhomes can be structured like condos—verify what you own and what the HOA maintains.
- Shared-wall risk: sound transmission and coordination for repairs.
- HOA enforcement: exterior appearance rules can be strict.
Step-by-step: confirm “fee simple” vs. “condo-style” townhome
- Check the listing and public record: look for “condominium” in the legal description.
- Ask for HOA docs: who repairs roof, siding, fences?
- Confirm insurance: does HOA carry a master policy? what does your policy need to cover?
Co-op (Cooperative) — Conceptual Overview
Concept: You typically do not own real property directly. Instead, you buy shares in a corporation that owns the building, and you receive a proprietary lease giving you the right to occupy a specific unit. Co-ops are common in some markets and rare in others.
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| Category | What to expect |
|---|---|
| Typical occupant | Often owner-occupants; rentals may be limited or heavily regulated. |
| Shared elements | Most building components are shared; the corporation controls major decisions. |
| Common fees | Maintenance fee often includes building operations and may include property taxes and underlying mortgage payments (structure varies). |
| Maintenance responsibilities | Interior responsibilities vary; building-level maintenance is centralized. |
| Resale considerations | Approval process can be strict (board interview, financial review). Financing options may be narrower; buyer pool can be smaller. |
Practical risk notes
- Approval risk: even with a willing seller, the co-op board may reject a buyer.
- Liquidity risk: fewer eligible buyers due to rules and financing constraints.
- Fee composition: monthly payment may bundle items that are separate elsewhere.
Step-by-step: questions to ask when you see “co-op”
- Is subletting allowed? If yes, what limits (waiting period, max years, fees)?
- What does the monthly fee include? taxes, utilities, building mortgage?
- What are the purchase requirements? minimum down payment, post-closing liquidity, debt-to-income guidelines.
Manufactured Housing
Concept: A factory-built home. The key risk/decision point is whether you own the land under it (real property) or rent a pad/space in a park (often treated differently in financing and resale).
| Category | What to expect |
|---|---|
| Typical occupant | Often owner-occupied; can be rented depending on park rules or local laws. |
| Shared elements | If in a park: shared roads, amenities, sometimes utilities. If on owned land: fewer shared elements. |
| Common fees | Space rent (if in a park) plus possible park fees; if on owned land, possibly HOA if in a community. |
| Maintenance responsibilities | Owner maintains the home; park/community may maintain common areas. |
| Resale considerations | Financing can be harder if the land is not owned; buyer pool may be smaller; park rules and rent increases matter. |
Practical risk notes
- Land-control risk: if you rent the space, your housing cost can rise via space rent increases.
- Financing/valuation risk: some lenders treat it like personal property unless permanently affixed and titled as real property (varies by jurisdiction).
- Condition risk: transport/settling, tie-downs, skirting, and moisture control are common inspection focus areas.
Step-by-step: evaluate a manufactured home listing
- Confirm land status: owned land vs. leased space.
- Ask about space rent and rules: increases, age restrictions, subletting, pet limits.
- Verify title/affixation: how it is titled locally and whether it qualifies for typical mortgage financing.
- Inspect setup: foundation/anchors, drainage, roof, and utility connections.
Small Multifamily (Duplex, Triplex, Fourplex)
Concept: One property with 2–4 separate residential units. This is often the “small income property” category because it can combine owner-occupancy with rental income (for example, living in one unit and renting the others).
| Category | What to expect |
|---|---|
| Typical occupant | Often mixed: an owner may live in one unit while others are rented; or all units rented. |
| Shared elements | May share walls, roof, yard, parking, laundry, and sometimes utilities. |
| Common fees | Usually no HOA (unless in a planned community). Operating costs include maintenance, insurance, utilities, and property management if hired. |
| Maintenance responsibilities | Owner/landlord is responsible for building systems and habitability; tenants handle day-to-day cleanliness and minor items per lease/local law. |
| Resale considerations | Value influenced by income and condition; buyer pool includes owner-occupants and investors; leases and tenant quality matter. |
Practical risk notes
- Operational risk: you are running a small business—screening, leases, repairs, compliance.
- Utility risk: if units are not separately metered, the owner may pay utilities, affecting cash flow.
- Tenant concentration benefit: vacancy in one unit reduces income but doesn’t eliminate it (unlike a single-family rental).
Step-by-step: first-pass analysis for a duplex–fourplex
- Identify unit mix: number of units, bed/bath count, parking, laundry.
- Check leases: month-to-month vs. fixed term, rent amounts, deposits, who pays utilities.
- Estimate operating costs: insurance, taxes, maintenance, utilities (if owner-paid), trash, landscaping, management.
- Inspect for deferred maintenance: roof, plumbing, electrical, windows, exterior paint, common areas.
- Confirm local rules: rental licensing, safety requirements, rent regulations (if applicable).
Side-by-side: how the categories differ in function and risk
| Type | Control | Predictability of monthly costs | Rules/approval risk | Income potential |
|---|---|---|---|---|
| Single-family | High | Medium (repairs can spike) | Low (unless HOA) | Low–Medium (one unit) |
| Condo | Medium (unit control; shared building) | Medium (dues + possible assessments) | Medium–High (HOA rules) | Medium (if rentals allowed) |
| Townhome | Medium–High (depends on legal form) | Medium | Medium (HOA rules) | Medium |
| Co-op | Medium (occupancy right via shares) | Medium (fee may include taxes/mortgage) | High (board approval, sublet limits) | Low–Medium (often rental-limited) |
| Manufactured | Varies (highest if land owned) | Low–Medium (space rent can rise) | Medium (park rules) | Low–Medium |
| Duplex–Fourplex | High (as owner/landlord) | Low–Medium (repairs + ops) | Low (unless HOA) | High (multiple units) |
Scenario-Based Practice: Classify Listings and Identify Decision Factors
For each example, do two things: (1) classify the property type and (2) list typical decision factors a buyer or landlord would focus on. Try to answer before reading the notes.
Example listings (8–10)
Listing A: “3 bed / 2 bath ranch on a fenced 0.22-acre lot, private driveway, no HOA, new roof in 2022.”
Type: Single-family home (detached). Decision factors: roof/HVAC age, yard drainage, neighborhood comps, future maintenance budget, insurance costs.
Listing B: “2 bed / 2 bath unit on the 10th floor, doorman building, elevator, HOA $640/mo includes water/heat, rental cap 20%.”
Type: Condo. Decision factors: HOA financial health/reserves, special assessment history, rental restrictions (important for investors), what utilities are included, building insurance and any litigation.
Listing C: “End-unit townhouse, shared wall on one side, small patio, HOA maintains exterior and roof, dues $210/mo.”
Type: Townhome (likely condo-style HOA maintenance). Decision factors: confirm exterior/roof responsibility in HOA docs, rules on rentals/pets, parking allocation, noise/privacy, reserve funding for roofs.
Listing D: “Row-style townhome, fee simple, you own the lot, no amenities, HOA $45/mo for private road snow removal.”
Type: Townhome (fee simple). Decision factors: exterior maintenance is on owner, shared-wall considerations, HOA scope (roads), insurance needs, resale appeal vs. detached homes.
Listing E: “Studio co-op, board approval required, 30% down minimum, monthly maintenance includes property taxes and building’s underlying mortgage.”
Type: Co-op. Decision factors: board approval standards, liquidity requirements, sublet policy, what’s included in monthly fee, financing options and buyer pool limitations.
Listing F: “Manufactured home in Sunny Palms Park, space rent $1,050/mo, park approval required, 55+ community, home sold separately from land.”
Type: Manufactured housing on leased land (park). Decision factors: space rent increases, park rules/age restrictions, resale demand within the park, financing type, condition of tie-downs/roof/plumbing.
Listing G: “Manufactured home on 1.1 acres, permanent foundation, private well and septic, no HOA.”
Type: Manufactured housing on owned land (often treated more like real property). Decision factors: foundation/affixation and title status for financing, well/septic inspections, access/driveway, long-term maintenance, insurance availability.
Listing H: “Duplex: two 2/1 units, separate electric meters, shared water meter, one unit vacant, one rented month-to-month at $1,450.”
Type: Duplex (small multifamily). Decision factors: market rent for vacant unit, utility billing (owner-paid water), lease terms and tenant screening, repair reserves, local rental compliance, parking and shared areas.
Listing I: “Fourplex: (2) 1/1 and (2) 2/1 units, coin laundry, owner pays trash and landscaping, roofs patched, tenants in place.”
Type: Fourplex (small multifamily). Decision factors: deferred maintenance (roof), income stability and lease roll, expense load (trash/landscaping), condition of common areas, rent upside vs. tenant turnover risk.
Listing J: “Condo conversion: 1 bed / 1 bath, HOA $390/mo, building is 80% rented, ongoing lawsuit with contractor over water intrusion repairs.”
Type: Condo. Decision factors: financing difficulty due to litigation and high investor share, water intrusion risk, potential assessments, insurance premiums, resale liquidity.
Practice method: how to answer any scenario in 3 steps
- Identify ownership + shared elements: detached land ownership? shared building? shares/lease (co-op)? leased pad (manufactured park)? multiple units (2–4)?
- Map money flows: HOA/maintenance fees, utilities included vs. separate meters, likely assessments, landlord operating expenses.
- List the top 5 decision factors: (a) rules/approvals, (b) maintenance responsibility, (c) financing/resale constraints, (d) cost volatility, (e) income stability (if renting).
