First Time Home Buyers: Single-Family vs. Condominium vs. Multifamily vs. Fixer-Upper
Finding your home can be a daunting task. Depending on the market you are looking at, it can be overwhelming and discouraging. If homes are on market for short periods of time, it can be difficult to feel as though you are doing the right amount of due diligence before making an offer.
By now you should have a pre-approved loan status and a good idea of what your future home will include based on your wish list. The only other variable that could help reduce your search is knowing if you want a single-family home, a condominium, multifamily housing or a fixer-upper. Be mindful of your life over the next five years. Are you planning on starting a family? Looking for a new job? Are you open to renting out part of your home for additional income? These are all areas to consider when finding your next home.
Single-family housing tends to be the most common for home buyers. Whether you decide new construction or an older home, there are advantages to both. Typically, older homes have a bit more space, are more affordable and location may be in a prime spot. However, you may have construction that is not up to code, upgrades and fixes may be in order to make it habitable, and heating/cooling efficiency, and insulation may be lacking. Whereas, a new build will have more efficient appliances and structural components, saving you money. However, it may be smaller and in a less than ideal location.
Condominium housing is a single unit within a multi-unit property. I always think of this as basically an apartment community where you can purchase the unit rather than rent it. Some of the benefits are similar to apartment living where you have a lower maintenance responsibility. Yes, that means you most likely don’t have to mow a lawn, or upkeep the grounds. However, you may experience a lack of privacy as compared to single-family living. Depending on the building, you may have to share common areas with other condo owners in the building and there may be an additional monthly fee that is used to upkeep the grounds and building repairs.
Multifamily housing means you are likely purchasing a 2-unit to 4-unit property providing you both an investment property and a personal residence. This comes with a higher cost as you are purchasing multiple units, however, in a good investment you are able to offset a large portion of the mortgage with renters. That said, you will be responsible with landlord duties such as finding tenants, screening, obtaining security deposits, rent and performing emergency repairs. Or, you can hire these services out to a local management company if you are okay with a reduction in your investment returns.
Fixer-Uppers are also a great investment opportunity and has gained popularity in recent years. Fixer-upper homes tend to be older homes that require updates and repairs to make it livable. These homes often come at a lower price point, however can require a lot of costs in rehabilitating the home. If you do not have experience in construction, it is highly recommended to hire a contractor to inspect the home and provide estimates on costs along with making sure you receive an inspection report so you can identify any large issues that may be costly like roofing, foundation, electrical or heating and cooling.
Once you have identified the type of home you want to buy, you can filter down the number of homes you search for. If you are early in your search and want to find ways to save money, learn more about Offer Assist. Faira provides you a way to make an offer on any home and once the home closes, you recieve 3% back.
Interested in buying a home but don't know where to start? Download the First Time Home Buyers Step-by-Step Guide today!