Is a Zero-Lot-Line House the Right Investment for You?

By Senior WriterPublished On: August 5, 20213 min read

When deciding on a type of residential property to purchase, zero-lot-line houses might be ideal, depending on what you’re looking for.

A zero-lot-line house, in many ways, is a great deal for those wanting to live in the city, but don’t want to live in an apartment, and the homes have the added benefit of being low-maintenance, low-cost properties.

They can also be great single-family rentals.

What Is a Zero-Lot-Line House?

In residential real estate, a zero-lot-line house is a house that is at, or very close to, the property line. Homes like these include rowhouses (which are often seen in cities), townhouses, patio homes, and garden homes.

Sometimes, zero-lot-line houses are attached to one another, like a townhouse, or they’re detached and built very close to one another. These types of houses are most common in cities. The name “zero-lot” comes from the idea that there is zero space leftover on the land once the homes are built.

Investors may view a portfolio of zero-lot-line houses as a single commercial real estate asset. This mindset is similar to how a multifamily apartment building is a single CRE asset, despite the fact that it contains many residential properties.

Advantages of Zero-Lot-Line Houses

For real estate investors, there are a number of positives to building and owning zero-lot-line homes. For starters, the architecture allows for more units of housing in a given space. In urban areas with a high density of people, homes like these ensure lots of available housing.

For buyers, zero-lot-line houses are just easier to maintain. There’s no need to worry about gardening or landscaping. Unlike an apartment building, you’re not sharing walls with your neighbors (with the exception of townhouses), so it allows for more privacy than a typical urban home.

Many people turn to apartments and condos because they don’t want to deal with the amount of maintenance and yard work a house comes with. However, apartments and condos come with very little privacy and independence, whereas a zero-lot-line house offers a bit more privacy while remaining low-maintenance. Even if you do share a wall with a neighbor in your townhouse, for instance, that’s only one wall, whereas, in an apartment, you could be surrounded by noisy neighbors.

Real estate investors also have the added benefit of cheaper housing, which allows the investors to purchase more properties.

Disadvantages

On the other end of the spectrum, zero-lot-line houses are not ideal for people who want outdoor space. If you’re looking for acres of land, then it’s not for you.

When compared to a standard house one might see in the suburbs, a zero-lot-line house also offers little in the way of privacy. For instance, in a row home, your window might be looking directly into your neighbor’s window, and your property might end right at the street, where many can see inside your home. Noise from the street intrudes on your quiet.

Also, for real estate investors, these homes will sell for much less than a standard house on the real estate market. On the one hand, buying the place for cheap serves as an advantage. On the other hand, when it comes time to sell, you’ll also be selling for cheap.

Is a Zero-Lot-Line House Best For You?

There are a number of factors to consider before buying a residential property, but if you’re looking for something low-maintenance, with the ability to house more tenants on a smaller piece of land, then a zero-lot-line house — or a black of them — could be the answer.

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