What Does Multifamily Home Mean in Real Estate?

A multifamily home is a single property structure containing multiple, independent dwelling units. This type of residence offers diverse living arrangements and financial implications, catering to individual households seeking rental opportunities or investors looking to generate income.

Defining a Multifamily Home

A multifamily home is a single building or property that encompasses two or more separate residential units. Each unit is designed as a complete living space, typically featuring its own kitchen, bathroom, and sleeping areas. The units are distinct and self-contained, allowing different households to reside independently within the same structure, often with separate entrances.

These properties range in size from small buildings with a few units to large complexes with hundreds of residences. While the entire structure is under single ownership, the individual units are typically rented out to different tenants. Multifamily homes with four or fewer units are generally classified as residential properties, while those with five or more units are often considered commercial real estate, impacting financing and zoning.

Types of Multifamily Homes

Multifamily homes come in various structural configurations. Duplexes, triplexes, and fourplexes are common examples of smaller multifamily properties. A duplex consists of two separate units, often side-by-side or stacked, sharing a common wall or floor. A triplex contains three distinct units, and a fourplex accommodates four units within one building, balancing single-family living and apartment complexes.

Larger multifamily structures include apartment buildings and complexes, housing numerous units from low-rise to high-rise developments. Garden-style apartments are low-rise buildings with multiple units, often surrounded by green spaces. High-rise apartment complexes, common in urban areas, can tower nine stories or more, offering numerous units and extensive amenities. These types cater to different population densities and provide diverse living experiences.

Key Features of Multifamily Properties

Multifamily properties share several defining characteristics. A primary feature is the presence of multiple, self-contained living spaces, each equipped with its own kitchen and bathroom. While units may share interior walls, ceilings, or floors, they have separate entrances, ensuring privacy for each household. Each unit often has its own utility meters, allowing residents to pay for their own utilities.

Beyond individual units, multifamily properties include common areas and shared facilities. These can encompass shared hallways, stairwells, and sometimes elevators, providing access to units. Common amenities include shared laundry rooms, parking areas, courtyards, or recreational facilities like swimming pools and fitness centers.

Distinguishing from Other Housing Types

Understanding a multifamily home involves distinguishing it from other common housing types, particularly single-family homes, condominiums, and townhouses. A single-family home is a standalone residential structure designed for one household, situated on its own plot of land without shared walls or facilities. In contrast, a multifamily home houses multiple households under one roof, offering potential rental income from additional units to help offset ownership costs.

The distinction from condominiums and townhouses lies in ownership structure rather than physical building type. A multifamily home is owned by a single entity, whether an individual or a corporation, who typically rents out the units. While condominiums and townhouses can resemble multifamily buildings in physical layout, they involve individual ownership of each unit, often with shared ownership of common areas through a homeowners’ association.