Multi-family investments are commonly in the lime-light of the real estate investing world. We seldom see the benefits of single family investments noted. The list of benefits is long and starts with our top 3 reasons why you should invest in single-family real estate.
Lower Tenant Turnover
Tenant turnover can make or break and investors business. If you’re regularly on the hunt for tenants your returns will be significantly impacted. Apartment buildings are an example of an investment with higher tenant turnovers. Families, and those with stable and reliable employment are common types of tenants in single family homes. Because of the stability in the lives of these types of tenants, and the lower tenant turnover in single family homes, you won’t need to be looking for renters constantly. The recent change in the mortgage requirements has made obtaining a mortgage extremely difficult for many individuals, even with the best credit scores and excellent income. While these rules are a negative for prospective homeowners, they are great for investors looking to keep long term tenants. When you combine the new mortgage rules and the fact that single family properties have lower tenant turnover, it’s an investors ideal rental situation.
It’s been said that real estate is one of the best investments you can make and we agree! Unlike volatile stock market investments, real estate holds its value for long periods of time. A single-family property with proper maintenance, in a great neighbourhood is going to market well 5, 10 or 20 years from when you purchased it. When looking at investment properties be sure to take note of the amenities in the neighbourhood or nearby, the local economy and the overall safety of the city and neighbourhood. Each of these factors will play a huge part in the potential resale value of your property.
Lower Costs Across the Board
Costs are always a major factor when determining the value of an investment. Commercial real estate tax is calculated differently and typically is much more than a regular residential home. When it comes to maintenance costs, you’re saving a ton by purchasing a single-family home. Single family homes only house an individual, couple or family and is only one unit you’ll need to maintain. If you purchase an apartment with 15 suites you’re going to have maintenance on all 15, plus common areas. When you factor in maintenance with high tenant turnover in apartment buildings you will find yourself performing maintenance more often than you may expect. As with any investment proper tenant screening can protect your property from extensive damage and increased repair costs.
Single family investments are a viable option to add to any real estate portfolio. If you’re interested in learning more about how we can help you get started, contact us today.