Single-Family Homes As Feasible Alternatives For First-Time Investors
Most people assume that purchasing single-family homes is limited to families intending to secure a permanent residence. However, the homes provide a lucrative income source for real estate investors. Many investors often purchase single-family homes and either rent or lease out the property to prospective tenants.
Investors are always on the lookout for ways to maximize the returns on their investments. A real estate investor must conduct extensive research before deciding what should or should not be included in their portfolio. Moreover, an investor must consider how much value they are likely to derive from a given investment. The following are some of the reasons why single-family homes are a good investment, particularly for first-time buyers.
Affordable Buying Prices
Single-family homes are typically more affordable than apartments in urban areas. As a result, single-family homes can provide excellent value to first-time investors. They come with a significant guarantee of tenants because many parents seek to find suitable single-family homes to provide conducive environments for their children. As a first-time real estate investor, consider purchasing single-family homes located outside central business districts to obtain low-price deals. The affordable rates will allow you to augment your investment portfolio.
Reliable Cash Flow
One major factor that every real estate investor must consider is the type of tenants they are likely to house. Single-family homes are popular among couples and families, making them far safer investment options than single-tenant apartments. A real estate investor who invests in single-family homes can expect a relatively consistent and reliable cash flow from rent. Single-family homes also retain their value better than other types of real estate investments, such as commercial real estate. If you decide to sell, there is always a demand, and buyers are always available. Overall, purchasing a single-family home and renting it out will guarantee you long-term income even after recouping your investment.
Low Maintenance Costs
Single-family homes are more manageable than entire apartment blocks. A real estate investor will spend far less money on maintenance and repairs. Regular repair and maintenance are required to avoid the occurrence of costly or irreversible damages. Moreover, investors can draw contracts that require tenants to repair faults arising from their negligence.
Single-family home investors also spend significantly less on inspection and survey fees. The rates and requirements are priced differently depending on the size of the property. Thus, it is recommended that small and first-time investors consider single-family homes because they are easy to manage with limited financial implications.