What is a rental property?
A rental property is a property in which the owner of the property lets another person(s) occupy the property and receives a payment in return. These properties vary in sizes and types.
The person who occupies the property is a tenant and the property owner is a landlord. There will be a legal contract between the owner of the property and the tenant. The tenant will have to sign that contract or a lease before moving into the property.
The lease specifies that the tenant is allowed to use the property and the landlord will receive compensation as a payment from the tenant. In addition, the lease specifies who will take care of utility bills, repairs, snow removal, etc.
Types of Rental Properties
There are many types of rental properties in real estate such as residential, commercial, etc.
The following are the most common rental property types.
- Condos (condominiums)
- Town-homes
- Single-family
- Multifamily
a. Condo Rental Property
Condos and apartments are the simplest forms of rental properties around. A combination of condos makes up a big building complex that looks like an apartment complex.
These types of buildings are usually managed by a homeowner association(HOA). A person who owns a condo becomes part of the association and pays a monthly fee. Learn more about condo rental properties
b. Townhomes Rental properties
Townhomes are a type of rental properties where each complex can have two or more units of shared walls. In general, townhomes are multistory and individually owned. There are times where an investor can owner multiple units in a townhome complex.
Each unit comes with its own garage, parking space, yard, etc. The homeowner association manages townhouses and owners of these properties pay a monthly HOA fee. Learn more about townhomes rental properties
c. Single-family rental properties
A single-family home is an individual property that has no shared wall or yard with others. Each single-family home has its own yard, parking space, yard, etc. They can come with a small yard or many acres depending on the location.
Single-family homes can be one level or multilevel. By default, there is no HOA fee that comes with a single-family home.
Note that there are cases where an association develops single-family homes. In this case, the owners of these properties will have to pay a monthly association fee.
The owner of a single-family home can use it as his primary residence or as a rental. These properties are designed to accommodate one family. Learn more about single-family rentals.
D. Multi-family rental properties
A multifamily rental property is a building complex that has multiple units where each unit can accommodate one tenant. Each unit will be independent of others. In other words, each unit will have its own kitchen, bedrooms, bathrooms, etc.
There are many categories of multifamily properties such as duplex, triplex, etc. The owner of the property leases each unit separately. Learn more about multifamily rental properties.
