Welcome to the second part of our video series in which we’re trying to settle the one of the greatest debates in real estate: investing in single-family properties vs. investing in multi-family properties. Part one of this series focused on the pros of investing in multi-family properties, so today we’ll examine the advantages of investing in single-family properties. One of the bigger advantages to investing in single-family properties is cost. The price of single-family investments is generally much lower than multi-family investments. To find out more about the advantages of investing in single-family properties, watch this short video.
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TRANSCRIPTION:
As one of the greatest debates in real estate, we’re constantly being asked about investing in single-family properties versus multi-family properties. Which is better? Last time, we discussed the pros of investing in multi-family properties, so today we’ll look at the pros of investing in single-family properties so you can decide for yourself which is better.
To reiterate, a single-family property is defined as a residential dwelling built on a single lot with no shared walls. Traditionally used for owner-occupancy, single-family homes can also be used as an investment vehicle to generate monthly income. With record low mortgage rates and fast-rising rental rates, these properties offer an assortment of pros.
One of the more obvious advantages is cost. The price of single-family investments is generally much lower than multi-family investments. Single-family investments also tend to appreciate more than other types of properties. This could be for a variety of reasons, but it mostly pertains to how lenders value each type of investment.
Single-family homes are valued on the supply and demand of owner-occupied buyers. Although financing guidelines and rules vary from bank to lender, financing a single-family property is usually much easier. Because these properties are typically much more affordable than multi-family homes, many investors will forgo financing options and purchase a property with cash.
Finally, the one aspect that many investors fail to consider when investing in real estate is the cost of managing it, which can vary depending on the number of units. With only one tenant, single-family rentals are much easier to manage.
Investing in real estate, whether it’s for single-family properties or multi-family properties, is not something to enter into lightly. If you have any questions, please give us a call or send us an email. We look forward to hearing from you!
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