Residential real estate can be defined as an area developed for people to live on. As defined by local zoning ordinances, residential real estate cannot be used for commercial or industrial purposes. There are different types of residential real estate. Read on as we break down each type of property that can be classified as residential.
Condominiums are usually fee simple transactions. Fee simple is the most absolute form of ownership in dealing with Real Estate or Real Property. Condominiums may be residential, industrial, or commercial. They may be newly constructed or converted from an existing structure of 2 or more units. Condominiums are usually sold as individual units. The remaining property or "common area" is owned & shared with the remaining owners of the other units. i.e hallway, gym, swimming pool, lobby etc. This option with considering which type of Residential Property suits you could potentially be ideal for somebody who is not inclined to dealing with the maintenance & up-keep of the exterior of their property & dwelling. Who is the initial owner of the Condominium structure?The owner or developer of the entire structure (Condominium) is called the Sponsor, who technically in most cases will be the person you will be buying your unit from.(Unless your buying a unit from someone who either has purchased theirs from the sponsor or another seller.) The Sponsor owns most of the units and controls the Board of Managers/Board of Directors, usually until The Sponsor sells more the 50% of the common interest of the units or after 5 years have passed since closing, whichever approaches first.
*Condop is a structure that has both Condominiums & Co-operatives in it.
Co-operatives are usually owned by Not-for-profit corporations. Therefore ownership is not a Fee Simple ownership. The way this is structured is by having "Shares of Stocks" within the Cooperative's corporation. It is looked at as being equitable to ownership of personal property rather then Real Property( the rights/privileges transferred with the ownership of real estate) or Real Estate (ownership of land and everything attached to the land).With that being said , you dont own the actually unit or share any of the "common areas".as you would if it were a Condominium.
*Board of directors manages the cooperative. The Board oversees the finances, maintenance & decisions of the cooperation.
Investment Properties are exactly that, it is a dwelling that you do no live in or claim as your primary residence and solely utilized to generate income/profit for thyself.The amount of income/proft would rely on your overhead/expenses .i.e. Mortgage vs. No mortgage. Taking a mortgage out on it would mean your paying off the property using your income from your rental(s) in hopes that it will turn a profit for you after all expenses./overhead is paid . Buying the entire property in one shot , would enable a faster ROi ( Return On Investment). Main reason being you wouldnt have that mortgage payment every month, allowing you to free up that money.
Single Family Properties
Single Family properties are by far the most common. Especially in this historic time to purchase Real Estate. With Mortgage rates being at an all time low and in recent addition to, we have the pandemic of the Corona Virus of 2020 , that has put the world on pause & turned Real Estate into uncharted territory for all those involved.A Single family property could either be attached or a detached structure designed and set-up for one family to habitat in.
Multi-family units are structures or dwellings that are designed and made for several families/individuals to Habitat in. Depending on the number of units, determines the individual living space. Most of the times these "Multi-family" units are investment properties. An individual, couple or corporation purchases said dwelling, and either lives in one unit and rents the remaining, or rents individual units, while having another residence, deemed their primary.
Apartments are typically reference to the Renting market. Although in NYC & major cities around the world they are bought/sold. No matter the number of units within the structure.
There is your break-down on the different types of Residential properties that are out there.
We hope this was informative to you and helped better your understanding of What Residential Real Estate is! For more information on real estate, home improvement tips, and more check out the rest of our blog.
About the author:
Written by: Adam Veit, NYS Licensed Real Estate Salesperson
Adam is a licensed realtor in the Staten Island real estate market and an experienced salesperson with a demonstrated history of working in the investment management industry. Skilled in Customer Service, Sales, Team Building, Management, and Leadership. He is a strong business development professional that graduated from Massanutten military academy.