Ownership of land or structures goes back millennia, but the widespread concept of individual homeownership as we know it today is relatively new. The form in which property can be owned varies depending on the location, corporate versus individual ownership, investment properties versus private residences and so on.
Different forms of property ownership have pros and cons, depending on how the owner plans to use the property or how much financial exposure the owner can shoulder.
Here are some basic phrases that play a role in owning property:
- Real property.
- Homeowners associations.
Real estate is generally considered real property, and usually consists of land and the structures on it. Some properties are mixed-use, consisting of both commercial and residential components.
There are different ways in which property can be owned, the simplest of which is “fee simple” ownership. This means ownership of the property is conveyed by a deed to a purchaser who will take title in one of several ways – including but not limited to corporate ownership, joint tenancy and more.
One notable aspect of owning residential property is potential membership to a homeowners association. Properties that are part of an HOA usually consist of individual, single-family homes in newer developments, and are required to abide by the rules set by an elected board of managers or directors. Within the HOA community, residents may not be able to build fences, landscaping or house extensions however they wish. They risk penalty if their plans go against certain rules.
If a homeowner violates a rule, the HOA may impose fines or liens on that resident and the house. Although some freedom is given up by the residents, the HOA’s rules and guidelines for the community should aim to preserve or improve the value of the properties for the good of the whole. Membership dues are often used to maintain, enhance or repair community amenities, facilities and common spaces.
Should You Own a Townhouse, Condo or Co-Op?
In more urban environments, like New York, Chicago, the District of Columbia or San Francisco, single-family homes with space between buildings are less common. In these more dense locations, homeowners are more likely to own a home that shares a wall, lobby or floor with other homeowners. Because of the shared space, the ownership is a bit different.
Here are the three popular types of residential real estate you'll find in a city setting:
- Cooperatives, or co-ops.
Townhouses are single-family homes, like free-standing houses, but they share exterior walls with neighboring houses. They may form part of a larger HOA, and abide by the community rules or guidelines, and then benefit from sharing costs and expenses for the common good.
In apartment living in a condo or co-op, there might be a live-in superintendent or doorman to help maintain the building. The owner of a townhouse, however, is mostly on his own fix any problems as they arise, whether it's salting the sidewalk in the winter, replacing an old boiler or taking the trash out to the street. There is certainly a pride of ownership that comes with all this, as well as certain freedom, but for many it’s also a lot of work and potential risk if any structural problems arise.
Condominiums are considered real property and are generally apartments within a larger building. The building is run by a board of managers and the occupancy of units is governed by the condo's bylaws and house rules. Many residential properties are built from scratch using this form of ownership to sell individual apartments.
Individual units can be sold, and the governing board of managers has a right of first refusal on any proposed transfers or leases. Many people like condos because buying or selling them is on par with selling a house in terms of ease of entry and exit. Owners can generally rent out condo properties and hold onto them as investments. Some people own condos for years without ever even living in them, just holding onto them as rental properties and hoping the market values increase over time.
A variation on condo ownership evolved in New York City and other places during the mid-20th century, known as the cooperative. Instead of a 100-unit residential building being subdivided into 100 individual condo units owned in fee simple, the building transfers ownership of the entire building to a cooperative corporation. Residents are offered shares in the cooperative corporation along with a proprietary lease, setting forth the terms and rules of residency. The cooperative corporation is governed by a board of directors.
Because the corporation is a joint investment and the co-op board members are shareholders, they may not allow just anyone to purchase an apartment (and shares) in the building. The board will look through the applicant’s finances, complete a credit check, ask for letters of recommendation and conduct an in-person interview.
In New York City, most co-ops have an absolute right to approve or reject proposed purchasers, as long as the reasoning doesn't violate fair housing laws that prohibit discrimination against protected classes. Though these restrictions may be a turnoff for prospective purchasers, one can make the argument that the institution of the co-op helps keep real estate values stable, even in the face of recession or economic downturns.
For example, when the housing market crashed in 2008, the foreclosure rate in Manhattan was significantly less than many other parts of the U.S. If a bank approved a loan for a borderline homebuyer, maybe with bad credit or insufficient financial qualifications, the co-op board would likely reject that candidate. Thus, even if someone was able to obtain a loan, they still might not pass a co-op board, which would act as another check to make sure buyers were not biting off more than they could chew in terms of shouldering the financial responsibilities of owning real estate.
For someone who is looking for a primary residence and plans to live there for years to come, a co-op can be a great option. There is often excellent value, and a certain level of control regarding the financial strength and even behavior of neighbors, which can protect the investment.
In the end, whether someone buys a house as a forever home or an income-producing investment property, a primary residence or vacation home or a house versus a unit within a large building, the type of ownership you choose may affect where you live, the building you live in and how you interact with your neighbors.
See which home style meets your needs.
When it comes to residential architecture, style and layout are influenced not only by prevailing artistic tastes of the period, but also by the way people live in and use their homes. In the Victorian era of calling cards and rigorously orchestrated entertaining, small reception rooms that flowed to and from formal dining rooms were ideal. Bungalows built before World War II typically have front porches, while post-war ranches and midcentury modern homes offer more private socializing and outdoor spaces. Even if you love the look of a particular architectural style, it won't necessarily suit your lifestyle and day-to-day needs. Here are seven of the most popular home styles you see in the U.S. today, as well as their pros and cons for contemporary residents.Historic brownstones and row houses
Historic brownstones and row houses
While brownstones and historic row houses are a quintessential New York City housing type, they can be found throughout the country, particularly in cities founded before 1900. Their shared walls made them easy to build on small urban lots, while their multistory layouts accommodated large families and gracious reception rooms. Row houses typically feature living rooms, dining rooms and kitchens on the parlor floor, beds and baths above and occasionally an English basement apartment or added living space on the garden level. These historic homes are coveted for their architectural detail, square footage and outdoor space, but they do have their drawbacks. Their shared walls restrict windows to the front and back facades, often leaving interiors with minimal natural light. Narrow buildings can mean smaller rooms, especially bedrooms. And while backyards are standard, you will have close neighbors on both sides.Modern and midcentury modern homes
Modern and midcentury modern homes
First introduced in the 1920s by renowned architects such as Frank Lloyd Wright and Richard Neutra, American midcentury modern architecture is known for its minimalism, clean lines and openness. Modern home design closely embodies the idea that form follows function, and postwar innovations in construction led to the abundant use of new materials, including glass, steel and concrete, in place of traditional brick and wood. These houses earn high marks for their walls of windows and fantastic natural light, and open floor plans offer plenty of space to stretch out and entertain. On the downside, that abundant glass brings with it a certain lack of privacy, and those modern building materials can often leave interiors feeling stark and cold. Many modern homes look their best when sparsely furnished and ultra-tidy, so collectors and families with small children may struggle with keeping their midcentury modern looking magazine-ready.American bungalows
There's quite a bit of variation in so-called "bungalow architecture" in the U.S., with examples ranging from small, shingled Queen Anne homes to stucco Spanish Colonial styles with red-tile roofs. Common traits within the genre are single or one-and-a-half-story profiles and layouts that strive to maximize space within modest proportions. Grand entrances and space-stealing hallways are absent, and front doors open directly into living spaces. Built primarily between 1900 and 1930, these houses offered homeownership at an affordable price. And while those benefits ring true today, even the most charming bungalow can suffer from cramped living spaces, low ceilings and small lot sizes. These homes were constructed economically nearly a century ago, so you should expect to dole out money for modernization and upkeep or be careful in choosing a bungalow that's already been thoroughly updated.Ranch homes
Popularized after World War II, ranch-style homes, often called ramblers, feature boxy, single-level layouts built on a concrete slab with low-pitched roofs and wide overhangs. They are particularly common in the West and Southwest, but can be found across the U.S. Single-story accessibility is a major selling point for ranch homes, especially for those with limited mobility or for families with young kids. Their flat, square layouts provide spacious and sunny living spaces typically with sliding glass doors that open to a rear yard, but with only one floor, you'll find less separation between entertaining and sleeping quarters. However, ranches can seem bland compared to other architectural styles. They lack basement storage, and their low-slung roofs make them less than ideal in locales where the temperature dips below freezing.Center-hall Colonials
Originally inspired by its Georgian and Palladian predecessors in Europe, American Colonial architecture can be traced back to our nation's earliest settlements, especially in Virginia and Maryland. Today, colonial revival is a leading architectural style among both new and historic homes featuring a uniquely American combination of gabled roofs, dormers, columned entryways and center-hall layouts. In this configuration, you arrive in a central hallway flanked by formal living and dining rooms. Kitchens and family rooms are placed in the rear of the main floor with beds and baths above. Rooms are typically bright and spacious. On the other hand, those who gravitate toward open floor plans may find colonial home entertaining spaces overly compartmentalized.Victorians
Popular for most of the 19th century and the start of the 20th century, Victorian architecture in the U.S. was heavily influenced by the Industrial Revolution. Facades include machine-cut and tooled ornamentation and flourishes, asymmetrical layouts and steep gable or mansard roofs that are decorated with dormer windows. Today, the colorful Victorian homes known as the Painted Ladies in San Francisco often come to mind, but houses of this era can be found across the U.S. in a combination of many styles and influences. Victorian homes are not for the faint of heart when it comes to maintenance and upkeep. Unless you acquire a thoroughly modernized Victorian, you can expect to put some money and effort into updating systems. Ornate woodwork and fixtures require skilled tradespeople for restoration and replacement, and these homes can be drafty if windows, insulation and walls aren't upgraded.High-rises
Not so much an architectural style as a housing type, high-rise apartments and condo buildings are the epitome of contemporary city living. Glass curtain walls deliver impeccable views, and modern construction means that systems like electrical and central air conditioning are top-notch. Within the latest luxury high-rises, residents enjoy desirable amenities, including fitness centers, roof decks, lounges, parking garages, storage and laundry facilities. However, there are downsides to living in a high-rise. Depending on the location of your apartment or condo, you could have multiple neighbors sharing walls, ceilings and floors, which makes noise and privacy a concern. Waiting for elevators is the norm with skyscraper living, and imagine walking down (and possibly back up) multiple flights of stairs if elevators need repairing. Private outdoor space is limited, and you'll pay a premium when it is available.Architectural styles to consider for your next home include:
Architectural styles to consider for your next home include:
- Brownstones and row houses.
- Modern and midcentury modern homes.
- American bungalows.
- Ranch homes.
- Center-hall colonials.
- High rises.