It’s truthfully hard to go wrong when deciding to invest in real estate. Whether you intend to live in a property yourself or lease it to tenants to generate passive income, it’s always nice to be putting money in your own pocket instead of your landlord’s. If you’re just starting out in real estate investment, choosing to invest in single-family homes instead of an apartment or duplex might be your best bet. Here are a few things to consider:
1. Higher Rent
First thing’s first: If you’re planning to lease your property in the future, you can rent a house out for more money than an apartment. The flip side of that coin is that apartment buildings generate multiple rent checks, but with that extra cash comes extra duties, maintenance, and responsibilities as a landlord.
2. Faster Appreciation
Location is everything, and there are multiple other factors to consider, but generally speaking, single-family homes cost less and appreciate in value faster than multi-family units. It’s always nice to see your investment working for you, and quickly. This makes a single-family home a good investment whether you intend to rent it out or not. Building equity instead of throwing it away on someone else’s mortgage means your housing payment is working for you, and not your landlord.
Also, as an investor, an investment for a single-family home isn’t deemed as risky as an apartment due to the sheer loan amount. Your mortgage will be more manageable and can be covered easier by your tenants’ rent payments.
Again, if you’ve made the decision to lease out your property, tenants are usually responsible for all the utility payments in a single-family home. In an apartment building, landlords often pay for water, and sometimes the gas and electricity. You won’t have to sweat wasted utilities or abuse of privileges if the tenants are the ones footing the bill.
4. High-Quality Tenants
It’s an unfortunate truth that statistically speaking, house renters tend to be more responsible than apartment dwellers. They take better care of their (your) yards and are also more likely to pay their rent on time. If you live in a home you purchase for any amount of time, chances are, you’ll become attached to it. You’d probably prefer for any future renters to take care of it as you would if you were still living there. People renting out a house are more likely to consider it their “home,” meaning they will treat it better, especially if they might consider buying it in the future.
Another thing to note is that house renters are also more likely to stay for longer durations, keeping you from having to deal with high turnover, space sitting empty, or the hassle of interviewing potential renters.
5. Yard Space
Buyers and renters alike are often looking for enjoyable outdoor space for their families. Single-family homes often times come with a yard of some sort. Somewhere for the kids and pets to play. This can make your investment property a more attractive prospect for renters than an apartment. It can also bring you greater enjoyment while you live in the property yourself.
6. Lower Maintenance
Most single-family homes only come equipped with one furnace, one dishwasher, and perhaps a toilet or two. When you make the jump to multi-family dwellings, well, now you have multiple appliances and fixtures which can malfunction and need your attention (and money). This would be true even if you were living in one unit and renting out others. More units = more potential for potentially costly maintenance concerns.
7. DIY Property Management
Maintaining a single-family dwelling yourself is a piece of cake compared to an apartment building. Between tenants and the maintenance, you’d be best served to hire a property manager to effectively deal with all the responsibilities and more frequent surprises that come with renting multiple units. Paying said property manager can eat heavily into your profits as an investor.
When managing a single unit, you will have the occasional repair that comes up, but if you are handy, you can make those minor repairs yourself. If DIY-ing it isn’t your thing, establishing a relationship with professionals in your area will save you some time and money when there is a problem.
Of course, managing real estate investments is also heavily influenced by personal preference. You have to choose the style and the property that’s right for you and your situation. That’s where we come in! We pride ourselves on our local area knowledge. Whether you’re looking for a forever home or a future investment, we’re here to help!