What is a single family residence?
A single-family residence is a structure that is used as a single dwelling unit, according to Law Insider. In real estate, a single-family residence is a house that is built on its own land, without shared walls, has a single utility system, etc. Single-family residences are widely available to many homebuyers and come in all types and sizes.
Requirements for a single family residence
Since a single-family residence must be a single stand-alone dwelling unit, there are requirements that must be met for properties in this classification. As noted by Realtor, the following are some of the requirements that a property must have to qualify as a single-family residence.
- It must be built on its own land: Single-family residences are built on their own parcels which are not shared with other properties. This is different from multifamily properties such as condos where the entire complex is built on a shared single plot. That is condo units are individually owned and the land is shared by owners.
- A single owner: In normal circumstances, a single-family residence is owned by one individual. There are cases where two people or more can combine their resources to buy a single-family home.
- One kitchen: Usually single-family homes have one kitchen. It is possible that a single-family residence can have more than one kitchen. However, the secondary kitchen will not be equipped will all appliances.
- One set of utilities per home: Single-family homes have one set of utility that serves the entire house. That is, there is one electric meter, one water meter, etc.
- No shared entrance or exit: Single-family homes have their own entrances and exits. That is no other person will access the interior of the house without access from the owner. Also, the outdoor area where the property is built belongs to the owner and has private access to the public road. This is different from apartments where owners or tenants can share a hallway, driveway, etc.
- No shared walls: Single-family residences do not share walls with other properties. Given the fact these properties are built on their own pieces of land, there will not share a wall with other properties.
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Benefits of single family residence
Single-family residences offer more flexibility, privacy, and more room compared to other properties. This is because they are built on their own parcel which increases the distance between neighbors. Hence improving every aspect of life.
In addition, single-family homes are usually less restrictive unless they are built in a planned unit development (PUD). Properties in PUDs come with stricter regulations set by a homeowner association(HOA) and owners must pay a monthly fee known as HOA fee. Furthermore, single-family residences are widely available which makes them easy to buy and secure financings such as mortgages, and loans.
Disadvantages of single family homes
Although single-family residences sound great, they come with setbacks. The following are some of the setbacks of single-family residences.
- High competitions: Single-family residences are the most available around the world. At the same time, they are the most wanted properties. For this reason, there is always a high competition for these properties. Not only that the buyer competes with investors, but the buyer also competes with other emotionally charged buyers. As a result, these properties sometimes sell for much higher than their market values.
- They are not great for investment: Real estate investors found it difficult to scale up single-family homes. This is because, for every property they buy, there will be closing costs, fees, research, and time. All these factors minimize cash flows investors get from these properties.
- The cost per unit could be much higher compared to buying a multifamily building such as a duplex.
