If you have money that you want to invest, real estate can be a smart choice. With real estate, you can use the income to pay off the investment, and once the investment is paid off, you can use that income to build your wealth. Single-family homes are often the point where most real estate investors start. Here are a few reasons why investing in a single-family home is a smart place for you to start your investment journey.
#1: High Rent Payments
One of the best reasons to invest in a single-family home is because you can charge a high rent amount for the property. With a single-family home, you only have one property to take care of, and you can charge the market rate for the rent, which should cover your mortgage as well as operating costs. You can generally charge more to rent out a two-bedroom home than a two-bedroom apartment or townhouse, making a single-family home a smart investment.
#2: Utility Bills Passed on to Tenant
When most people rent a single-family home, they expect to cover the utility payments in addition to the rent. When people rent apartments, they expect some if not all the utility bills to be covered by their rent. With a single-family home, you don't have to pay for your tenant's usage of the water, gas, and electricity, lowering the cost of the home for yourself.
#3: Attract High-Quality Tenants
The type of people that look to rent a home tends to be a little different than those looking to rent an apartment. As the rent often is higher, single-family homes tend to attract renters with higher incomes. People are also more likely to settle into a home, enjoying the open space and the lack of neighbors on either side of the walls, or above and below them.
With a single-family home, you are more likely to attract long-term renters. It is better, when managing a single investment property, to have a long-term tenant than to deal with finding new renters every six months when your current tenants move to somewhere with cheaper rent.
#4: Easy to Self-Manage
If you want to get the most out of your investment, you may want to manage the property on your own. A single-family property is often easier to manage than an apartment.
With an apartment, you have to deal with the other apartment owners if you only own one unit, and if you purchase an entire apartment building, you will have to deal with taking care of more appliances and needs for each apartment in the building. A single-family home is much easier to manage, and you can draw on your own experience as a homeowner to help you keep the property in good shape.
If you want to get into real estate investing, find a real estate agent who can help you find a single-family home in a good school district and area of town. A single-family home can be easy to manage on your own. You are more likely to attract high-quality tenants with a single-family home, and you can charge a high rent that will allow you to quickly pay off your mortgage and start saving the rental money and building your wealth.
When you are faced with a down market, there are a lot of things that can run through your mind as a homeowner. If you had to sell, would you be able to make your money back? What will you do if you have to sell your property at a loss? Do you think you are ready to buy a new home?
Although there are a lot of things that are important to think about, the fact of the matter is that understanding real estate challenges is instrumental to making money with your property. From moving forward with new ideas about real estate to working with the right professionals, it pays to read up on the market. Learn more today!