With the plethora of property types available in the market, it can be daunting for new investors to pick which one to invest in. In the property market, single-family homes are the most common type, which leads to plenty of first-time investors choosing them. You may wonder if opting for a single-family home is the right route to take. The answer is a clear and resounding yes! All property investments have their pros and cons, but single-family homes generally offer more benefits than drawbacks.
Defining A Single-Family Home
A single-family home is a stand-alone unit and is found in suburban and rural areas. Typically, single-family homes showcase a front and back yard and come in various shapes and sizes. They can be suitable for all kinds of renters, which is why they are attractive to most people and highly popular as a rental place.
Why Should You Invest in Single-Family Homes?
Here are some listed reasons why new investors should opt for single-family homes over other property types:
Demand is Always Rising
Before making your final decision on which property to invest in, make sure that you have performed a demand forecast to ensure that your rental won’t be sitting empty for a long time. The good news is that single-family homes are sought after by a majority of residents no matter the demographic.
The perks of living in this type of dwelling are you gain access to privacy and enjoy more space, which can include a yard. The high demand for single-family homes has led to fewer vacancies which makes investing in them a great idea for new investors.
You Can Maximize Profit when Investing in Single-family Homes
Another advantage that single-family homes offer is the solid income you earn from renting them out. Given the high demand, you are more likely to find potential candidates quickly, thus generating rental income. Annual rental increases are also common with this type of property. What’s more, tax deductions come hand in hand with single-family homes.
Various Single-family Homes are Affordable and have Faster Appreciation
Even if there is a high demand for single-family homes, affordability is often not an issue as there remain plenty of options when selecting the best property for your investment. Compared to multi-family buildings which carry a steep price tag, single-family homes are more reasonable. In addition, given its smaller size than multi-family units, you won’t need to spend much time on upgrades so you will be able to save more and rent out your unit right away. Aside from the reduced price tag of single-family homes compared to other property types designed for more residents, they also appreciate faster.
You Can Use Plenty of Rental Strategies for Single-family Homes
Since single-family homes are affordable, profitable, and show high demand, you can be sure that several rental strategies are applicable. You won’t need to stick to traditional renting and can offer it to short-term renters. Furthermore, you can engage the services of a property manager who often has a lot of industry experience and local expertise. You end up with a committed partner who can provide effective strategies that will make your single-family rental a success.
Financing a Single-family Home is Easier than Other Property Types
While seeking financing for multi-family units can be challenging, this is not the case for single-family homes. Since it is priced lower than other property types, it can be easier to meet the downpayment requirement and secure more potential lenders who are willing to finance your property investment.
Managing Single-family Homes is Hassle-free
Managing a single-family home will often be easier compared to multi-family properties and duplexes which can require more maintenance and resident management. With its smaller square footage, managing the general upkeep will also require less time. Still, whenever you want to hire a property manager, the option is there if you want to have a hands-off approach to owning your single-family rental space.
Setting Up Utility Bills is Easier with a Single-family Home
With single-family homes, residents are often in charge of registering for essential services, which keeps property owners from feeling stressed. Compared to owning a multi-family unit where you will include the water and electric bills in the rental payment, your single-family home offers you more peace of mind.
Top-tier Residents Prefer Single-family Homes
When potential candidates send in a rental application, you can expect that they are capable of paying the rental price. Single-family homes tend to attract higher-quality renters who are looking to stay for a longer duration. As an investor, you can enjoy more consistent income and lower risks for resident turnovers. Additionally, you will be juggling fewer resident issues since you only cater to one or two residents in contrast to owning a multi-family rental.
You Can Easily Market Outdoor Space as a Prized Amenity in a Single-family Home
With a lot of people preferring to have an open space to accommodate their gardening hobby or friendly barbeque get-togethers, you can be sure that single-family homes are quickly snatched up by renters. You can add more value by improving your outdoor space with attractive landscaping and well-designed outdoor furniture. Fences can also contribute to more privacy, which can delight your residents.
Bottom Line
There are numerous benefits to investing in single-family residents. That said, managing them can be daunting. If you are looking for a property manager to handle resident screening and property marketing for your single-family home, contact Five Star Property Management today!