Are you planning to purchase a property or start your real estate journey? If you are, you need to know about multi-family homes. But what exactly are they you may ask. Not to worry, in this guide, we will cover all about these properties.
What are Multi–Family Homes?
As the name suggests, it refers to any residential property that has more than one housing unit. In fact, a multi-family home can be anything from a duplex, townhouse, or even an apartment complex. In the case where the owner chooses to reside in the property, it can also be considered an owner-occupied property.
Types of Multi–Family Homes
Now that you understand what multi-family homes are, let us take a closer look into their variations.
- Duplex
One type of multi-family home is the duplex. This refers to two-story homes with separate living spaces for each family on a differing level. They share a foyer and a front door. Nevertheless, the foyer serves as a distinct entry for each apartment. A home with 4 or 3 distinct apartments is known as a triplex or quadplex in a similar way.
- Townhouses
Another type is the townhouses. In this case, they have common outside walls. Each has a distinct entrance that may be bought and sold independently. The length of a city block is frequently taken up by a row of townhouses.
- Semi-detached homes
Next, we have semi-detached homes which only have two apartments. Besides that, they resemble townhouses quite closely.
- Apartment Complex
Lastly, an apartment complex is another type of multi family home. It refers to a single building that contains more than 4 distinct dwellings. Common amenities such as a playground, parking lot, and swimming pool are typically shared among residents.
Are Multi-Family Homes Considered Commercial Properties?
You probably know that the two main types of real estate are commercial and residential properties. But what about multi-family homes? Are they considered commercial or residential properties? multi-family real estate is not always residential.
The distinction is whether or not a return on investment is the property’s primary objective. If so, it qualifies as commercial real estate. Apartment complexes and buildings with mixed uses are included. To put it simply, any property with five or more residential units is regarded as commercial real estate.
According to tradition, a property is considered residential if it has four or fewer housing units and no commercial buildings. These include duplexes, triplexes, quadplexes, semi-detached homes, and townhouses. However, apartment complexes and buildings are considered commercial properties
Benefits of Multi-Family Homes
Investing in or owning multi-family homes can allow you to enjoy several benefits. And this includes having more financial flow from a bigger pool of renters. And this can allow you to earn a second source of money.
Not to mention, it also makes it simpler for you to swiftly recoup your investment. Additionally, if you want to reside in one of the apartments, your family’s space will also not be invaded by tenants. Another benefit is you can enjoy additional tax benefits, have greater power over your property value and repairs, and can even showcase your diversified investment portfolio.
