Types of Apartments: A Guide for Owners and Investors

As of June 2017, one in every eight people calls an apartment home in the United States. That's nearly 39 million total Americans living in multifamily units! While demand for affordable housing is at an all-time high, many real estate investors are exploring apartments as investment opportunities. 

But what exactly constitutes an apartment? Most easily defined as a room or set of rooms used as a place to live, apartments are found in a building with other residences, unlike single-family homes, which house just one family unit.

Apartments are technically the most common housing type in the United States, with approximately 19% of renters living in structures with 2-4 units and 44% living in facilities with five or more units. Apartment complexes can vary significantly in size, from as small as two separate units or a duplex to as vast as hundreds of residences in a building or complex. 

Apartments house all demographics in low-income, affordable areas and expensive, trendy neighborhoods. Some communities also offer short-term vacation apartment leases for savvy travelers.

Why Investors Should Understand Different Types of Apartments

Apartment buildings are a popular commodity for real estate investors. While not a simple task, apartment building investment and rental management can be lucrative and fulfilling. Many apartment building owners choose to hire a professional property manager to handle tenants and to oversee the maintenance and upkeep of the building rather than do the work themselves.

As apartments account for over 30% of all the nation's rental housing units, investing in multifamily units can generally be a sound choice for many real estate investors, but keep in mind that each investment opportunity is unique. This guide will answer many preliminary questions a real estate investor may have when deciding on their next investment.

Types of Apartments

The world of apartment living is as diverse as the people who occupy the units. With hundreds of thousands of units nationwide, there's a perfect fit for everyone, no matter your lifestyle or budget. Here are twelve typical types of apartments to be aware of when searching for your next investment:

1. Studio Apartment: A studio apartment is a compact unit with a single, open living space that combines the living, sleeping, and kitchen areas. It is typically ideal for individuals or couples seeking an efficient and minimalist living arrangement. 
2. One-Bedroom Apartment: A one-bedroom apartment features a separate bedroom in addition to a living area. This layout provides a bit more privacy and square footage, making it most suitable for singles or couples.
3. Two-Bedroom Apartment: A two-bedroom apartment consists of—no surprise—two separate bedrooms. This offers ample space for small families or roommates, along with a separate living area, one or two bathrooms, and a kitchen.
4. Three-Bedroom Apartment: A three-bedroom apartment provides three separate bedrooms, making it suitable for larger families or shared living situations. A three-bedroom apartment includes at least one shared living space, multiple bathrooms, and a kitchen. 
5. Loft Apartment: A loft apartment is much like a studio apartment, featuring an open layout. But unlike a studio apartment, loft apartments are spacious, with high ceilings and industrial elements. They're often located in converted warehouses or factories, offering a trendy and spacious urban living environment.
6. Duplex Apartment: Duplex apartments are defined in two ways. Either an apartment spanning two levels within a single unit or a building with two separate entrances, each with its own entrance. Duplexes are often single-family homes converted into apartment living by separating the living and sleeping areas and creating a versatile option for families. 
7. Triplex: A triplex apartment building contains three separate units with its own entrance. Depending on the architectural layout, some triplex units will also comprise three levels within a single unit, offering even more space and potential for customization in terms of design and functionality. 
8. Co-op: A co-op apartment is a unique ownership arrangement most common in large cities with limited homeownership opportunities. In this living situation, residents purchase shares in a cooperative housing corporation, granting them the right to live in a particular unit, often requiring board approval for occupancy. 
9. High-rise: A high-rise apartment resides within a building at least ten stories tall. High-rise buildings typically offer impressive views of the surrounding area and varying unit sizes and layouts to accommodate diverse lifestyles.
10. Penthouse Apartment: A penthouse apartment is located on the top floor of a building and is known for its luxurious features, spaciousness, and often exclusive access to amenities, making it a symbol of upscale urban living. The penthouse unit may include its own private elevator entrance, balcony, or terrace on the top floor of an apartment building.
11. Alcove Apartment: An alcove apartment is a type of studio apartment with a small alcove to be used as a semi-separate sleeping or living area, providing a sense of division and versatility within a single unit. 
12. Micro Apartment: A micro apartment is tiny, typically less than 500 square feet. Compact living layouts designed for efficient use of space, often featuring clever storage solutions and multifunctional furniture, make micro apartments ideal for urban dwellers seeking minimalist living. 

No matter what your strategy, there are types of apartments to attract tenants with every lifestyle, personal preference, and price range—from the cozy simplicity of a studio apartment to the luxurious heights of a penthouse. 

Depending on your budget, capacity for property management, and ideal renter, use this list to narrow down the types of properties you consider investing in. If you find yourself attracted to a specific type of apartment, but still unsure if you have the resources or know-how to effectively find and manage the right property, a property management company can help.

To keep profits high and frustrations low, many real estate investors opt to partner with a professional property manager. They’re equipped to handle the complexities of property management, from exploring investment options to covering the nitty-gritty of daily operations,  allowing you to focus on collecting those rent checks and finding the next great investment opportunity. . 

Ready to find a property manager who suits your needs? Browse APM's comprehensive directory of property management experts for free.