Buying a home is a major investment that should be given ample thought and consideration before you dive in. First, you have to start by sorting out your finances, get pre-approved for a mortgage and start searching for a property that will meet your needs. Once you have made a short list of a few homes that you could see yourself living in, there are a few ways to help further narrow down these selections.
Choosing a home is one of the most important steps in the home buying process. However, many prospective owners forget that there are more than just single-family homes available on most marketplaces. Other options, such as multifamily homes, condominiums and co-ops all come with certain pros and cons to homeownership.
What to consider
When thinking about what kind of home you want, it's recommended that you consider the needs of your household. This can include, space requirements, property size and personal tastes. In addition, if you like one particular kind of home, it might be part of a niche market, making it more difficult to resell should that day ever come. In addition, you should also consider the different perks of buying a new home versus buying one that's existing. Older homes tend to be located in closer to city centers, requiring a shorter commute, while newer homes are often located farther from metro areas.
Multifamily homes
Many first-time buyers opt for a multifamily home because it can be a great investment opportunity in the future. A multifamily home can come in many different forms, but most commonly as an apartment. Since units are often smaller in size, they are great for a family just starting out. However, once your household starts to grow and mature and you make the transition to a larger property, you can convert this home into a rental property, creating an additional source of income.
Another aspect of a multifamily home that can be viewed as both an advantage or disadvantage is that they tend to not come with property. This means you won't have a yard to look after, cutting down on the amount of time and maintenance you will need to invest to keep the property in good shape.
Condominiums
Purchasing a condo offers more of a communal living situation. With condos, you personally own everything inside your units, while community areas – including yards, hallways, stairwells and roofs – are shared spaces. As a result, you will likely be required to pay an association to maintain these parts of the building.
While paying a monthly association fee is an added expense, it can significantly cut down on the amount of time and costs you will have to pay out of pocket to maintain the property. This can be an advantage if you don't have the time or energy to keep your home together. However, it can give you limited options when it comes to personalizing your home.
Co-ops
This option is often more popular in apartment complexes located in urban areas. If you buy a co-op, you will most likely be required to be pre-approved by a board managing the building. This can be a tedious process because if you are given the go-ahead to purchase the home, you will start paying a share of the entire building's mortgage as well as monthly association fees.
