Properties come in all sizes and shapes and are mainly categorized by their use. Residential houses, for example, are categorized as residential as they are used for residing. Properties that are used to generate profit are categorized as commercial. Then, there is vacant land too.
Knowing the different property types is important for people looking to invest in properties. Also, when buying a property or renting one, especially residential properties, the listings on a real estate website might confuse you with all the types available.
There are three main types of properties: residential, commercial, and vacant land.
Residential property includes any property used as a dwelling place for an individual or a family. Residential properties are most widely bought. These properties can either be rented or purchased to live in.
Residential properties include different types of dwellings, including single-family homes, duplexes, townhouses, cooperative housing (co-op), bungalows, apartments, and individual mobile homes. These are the most common residential property types; however, many more fall under the umbrella of residential properties.
A single-family home is precisely what it sounds like – a residential house for a single-family. It is a free-standing building that does not share walls with other units. It is owned by a single owner and used by a single family. It is a complete place to live featuring bedrooms, a kitchen, and a living space that you and your family can use.
This type of property is expensive to rent or buy. Being the sole owner of the dwelling, you might need to pay for all the costly repairs yourself too. However, an advantage of investing in a single-family home is that you can change it in any way you like at any time.
This residential property type is a multifamily home having two separate units. The two units can either be arranged on top of each other or built side by side. However, they always share a wall. There is usually one owner owning both units of a duplex house. Most duplex owners live in one unit themselves and rent out the other for income.
These units have separate entrances and are not connected from the inside, allowing privacy. However, there might be sharing of outdoor spaces involved if the duplex has a front yard. There are also triplex and fourplex multifamily houses having three and four units, respectively, built side by side or on top of each other.
Townhouses are like single-family homes, but they share walls with other units within the same building. They all have separate entrances and there won’t be anyone living below or above. They usually have multiple floors with stairs present inside the home.
However, the footprint of a townhouse may be tiny. It also has direct street access. Townhouses are comparatively low maintenance. Some townhouses may include a small yard too.
Cooperative Housing (co-op)
A co-op allows for easy living. They mostly do not have yards or outdoor spaces. The owner of this particular property type does not have sole owners, but the ownership is shared between all the members of the building, so everyone pays.
There are no particular units to own, but you would own a stake in the property. This allows the owners to control who buys into the building. However, the financial contribution of the person who moves out will then have to be covered by others living in the cooperative housing.
Bungalows are primarily single-story buildings that are easy to maintain. It is big enough but not huge. Compared to single-family homes, bungalows are more economical. These types of houses do not share walls with the building around. They are like apartments but detached.
Bungalows are common in family neighborhoods and usually include front porches, lawns, and private garages. They are a perfect way to start a married life for new couples.
Apartments can be bought but are mostly rented. They are a convenient place to live if purchasing a bigger house is not an option for the time being. Usually, there are many apartments within a building, and they are stacked on top of each other. Each apartment is a different unit and has one single level in most cases.
Each apartment within a building has a single owner. They are complete homes that come with their own kitchens and living spaces. There is a big parking lot usually at the base of the building for residents to park their vehicles. Since they are stacked on top of each other, they don’t have lawns or backyards.
Individual Mobile Homes
One thing that makes this type of home quite different from all the other residential property types is that they are built off-site and then brought to the final location. They don’t share walls with houses on either side. Individual mobile homes are a much less expensive option for those who are tight on cash but want to own a home.
Whereas residential properties are owned or rented for personal use, commercial property types are not used as a place for families to live in, but are acquired by people for business and investment reasons. The sole purpose of getting a commercial property is profit generation. It can be an empty land or a building.
Commercial properties are considerably more expensive than residential properties and vacant land. Office buildings, hotels, hospitals, industries, supermarkets, gas stations, and shopping malls are all examples of commercial properties.
Vacant land property is a piece of land with nothing built over it. It may have had something built over it in the past, which might have been demolished. It can include ranches or farmlands too. The cost of vacant land is dependent on the size of the land, its location, and zoning.
Vacant land located in commercial areas might be more expensive than in residential areas. Sometimes, this particular property type may also refer to raw land, including undeveloped land or natural resources such as minerals, water, and air rights.
There are various property types, and each type is used for different purposes. They come in different sizes and have varying costs. Residential properties are purchased most frequently in the market. They are private spaces used by people to live in.
Commercial properties are used for business and to generate profits. They are the most costly in terms of price compared to the other two types of properties. Vacant lands are empty pieces of land, and their cost depends on their location, size, and zoning.