Property types are quite similar in most western countries, however there are regional differences and it is important to know exactly what is meant by each property type description in the US.
There are Residential, Industrial and Commercial opportunities in the United States just as there are in in other countries. Property Made Easy focuses on US Residential Property although we can assist with or refer interested parties to trusted associates within the commercial field.
Some important terms used in the US Residential Property market are described below.
Condos and apartments can have many facilities.
Apartment: This is one of a group of units NONE of which are individually owned. The entire complex is owned and run as a commercial endeavour.
Apartment complexes may be very small or large (4 – many 100’s). They are often close to city centres and focus on tenants desiring 6 -12 month leases desirable when people are new to an area and getting established. Because of this, public perception can be that apartment complex tenants are more transient and that there may be a higher crime rate.
Complexes may have few or many lifestyle facilities depending upon the quality of the complex. These may include gate and/or guard gated communities, tennis courts, beach volleyball, multiple pools and spas, sauna, BBQ areas, walking tracts, dog runs etc.
Condo: This is any privately owned apartment or unit. They are built in small or large complexes (4 – many 100’s) with few to many lifestyle facilities. Condos are all privately owned and can be owner occupied or rented. There is sometimes a cap on the number of condos that may be rented within a complex. Because condos are made to be sold to owner occupants they tend to be a little larger and of a higher quality than shorter term stay orientated rental apartments. Renting in a condo complex is generally considered more desirable than renting in an apartment complex.
Almost all condo complexes have a Home Owners Association (HOA). This is the equivalent of a Body Corporate in Australia. In the US, communities of single family residences (SFR) and town homes can also have HOA fees, but these are usually much lower than condo HOA fees. The condo HOA fee often includes the cost of services such as water, trash, sewer, some insurance & sometimes gas.
Condos are typically cheaper than town homes and single family residences because you BUY THE AIRSPACE, NOT THE LAND. With a condo you would own the airspace the condo occupies and become a part owner of the complex and its facilities.
Condo Conversions: This is an apartment complex that has been rezoned to condo use. Because they were originally built to apartment rather than condo standards caution must be exercised in their purchase. These can still be good quality cash flow properties though. A lack of affordable housing spurred councils in many US cities to allow the rezoning of many apartment complexes, particularly during the 2005/2006 property boom. This occurred in Las Vegas and to a much smaller extent in San Antonio.
High Rise Condos: are typically high end luxury high rise condos in the most desirable of locations. They can range in size from 600 square feet (SF) studios to Donald Trump’s 30,000 SF New York condo (reported by Forbes magazine to be worth $50 Million). Like all condos they have a variety of services and facilities.
They typically have high HOA fees of $700 – $1000 per month. Some are managed by on-sight hotel or management companies with short term, high rental income opportunities available.
There are a number of these available on the Las Vegas Strip and in inner city San Antonio. Many people consider such properties as a mix of personal holiday use and investment.
Town Home: This is a home that is attached to an adjacent property. It may have one, two or three adjoining walls.
Town homes vary in size but tend to occupy less land than single family residences (SFR), although they often have private courtyards. Importantly, the purchase of a town home INCLUDES the land on which it is built so town homes are normally considered more valuable than condos. Town homes have two or more residences, often with different floor plans under one common roof.
Duplex: is a specific type of town home with one dividing wall creating the equivalent of ONLY two town homes under one common roof with the floor plan of each being a mirror image of the other.
Classic Vegas 70’s Pool in SFR
Single Family Residence: is any free standing, detached house. They vary greatly in size and features. They are generally the most desirable and in demand type of property in the Las Vegas and San Antonio markets. Their intrinsic value is the land on which they are built.
Patio Home: is an SFR normally with a VERY small back yard, often only a small, 10 x 10 foot patio. Homes are often very close together on small blocks. Essentially they are town homes with a very small space between walls rather than adjoining walls…it was a sales strategy
Guest House: is an additional structure (or conversion, such as a garage) that is a self contained accommodation with a bed, bath and usually kitchen or kitchenette. Council guidelines change over the years so it is important to ensure whether these have been permitted. Many older SFR’s may have guest homes that have been ‘grand fathered in’ by council.
Casita: is an additional structure to an SFR, either attached or detached, that typically has a studio type layout and bathroom. They normally have been council permitted but are not permitted for a kitchen. These tend to be used as pool houses, games rooms or teenager retreat.
Single Family Residence: 1 – 4 SFR. This is a lenders term for a loan type. Normal residential home loans in the USA fall into this loan category and have similar lending guidelines. If you finance a home within the USA chances are your loan will fall into the 1 – 4 Residential Loan category regardless of state.