As the name suggests, single-family homes are residential structures that are intended to house one family.
All other residential structures are considered multi-family homes, whether they’re duplexes (two families), quadruplexes (four families), apartment complexes, condos, or townhomes.
Nearly 20% of Americans live in an apartment or multi-family home, but 80% prefer to live in a single-family home. If you’re one of the 80% with this preference, here are three options you have for living in a single-family home.
1. Rent a Home
Renting a home is very similar to renting an apartment, condo, townhouse, or any other type of residential property. More often than not, the monthly cost of renting a home is much less expensive than the monthly mortgage payment that comes with owning a home.
You also don’t have to worry about the ongoing costs that come with owning a home: repairs, maintenance, property taxes, and homeowner’s insurance. When renting a home, you must do the following:
- Create a rental budget
- Make a list of what you want the house to have
- Use real estate search sites to find what you want
- Set up times with the landlord to tour the houses you like
- Discuss rental terms with the landlord
- Fill out a rental application and pay the application fee
- Sign the lease
Your lease is the contract that states the terms of renting the property. A lease usually lasts for a year, but it can vary depending on the landlord.
Just keep in mind that your monthly rent may increase every time you renew your lease. On the other hand, it’s much easier to move when necessary when renting, than it is when you own a home.
2. Buy a Home
As briefly noted above, buying a home can be much more expensive than renting a home— especially when you factor in the costs for things like trash pickup, water services, appliance maintenance and repair, homeowner’s insurance, and property taxes. However, there are a lot of benefits that come with owning a home that you don’t get with renting, including:
- More freedom when it comes to home improvement
- More privacy
- Improved credit
- The ability to build equity
- Tax advantages
It’s important to understand the real estate market before you buy a home— after all, it’s a big investment. It can be a scary process, but there’s an option that combines both renting and buying called rent-to-own.
This is when the renter/buyer and seller come up with a purchase price in a contract, the renter/buyer pays a “down payment”, the renter/buyer pays rent for a specified amount of time, and then the renter/buyer has the option to apply for a mortgage and buy the home at a later date.
This option gives you the best parts of renting and eventually owning a home, but it also comes with disadvantages of renting and owning.
3. Build a Home
If buying or renting a home doesn’t appeal to you, there’s also the option of building your own home. Sometimes, there are sub-options within this option, including semi-custom homes or speculative homes (move-in ready homes). When custom building a home, you’ll usually have to take these steps:
- Hire and work with an architect to develop floor plans
- Find a location and buy land
- Select a builder
- Hire and work with an interior designer
Semi-custom home building is a hybrid option of custom building and an already existing home. This is when a home building company has a library of home designs that they can easily have constructed for their clients. There is still room for customization, but it’s limited to what the homebuilders can provide.
Finally, speculative “spec” or move-in-ready homes are built with the average homebuyer in mind. So if you want a brand new home, but you don’t want the responsibility of customizing one from scratch or at all, then this may be a good option for you.
However, it’s important to note that spec homes are built to sell, meaning that you may not necessarily be the first person to live in a particular spec home.
So these are the three options you have when it comes to living in a single-family home. Historically, the majority of people would buy an already existing home, but renting and custom building are becoming increasingly popular options, especially when it comes to vacation homes. Just make sure to do your research to determine the best single-family home option for you.