For many people, the term "real estate investment" conjures up images of large apartment buildings or at least a couple of duplexes. This is a common approach. Buying one building and collecting multiple rent checks for the same property each month is a great way to earn an income. However, it is not the only way to earn an income as a real estate investor. Some investors are actually better off investing in single-family homes. Here are a few advantages of that approach to consider.
There is often an abundance of fixer-uppers and foreclosures on the market.
In almost any community, you can find multiple under-valued, single-family homes for sale. Some might be underpriced because they need some work or are simply outdated. Others may be underpriced because the owner just needs to get out, fast. In any event, you tend to have a large selection of homes to choose from when you buy single-family properties — and you can buy them very affordably. Some might need a little work and money invested in remodeling before you can rent them out, but this is not always necessary. Often, a house that looks outdated but is still structurally sound can be rented out as-is.
You won't have to find as many tenants.
Searching for tenants is one of the most time-consuming parts of being a landlord. You have to read through application after application, call employers, and screen credit reports. The less of this you have to do, the better, right? If you make a career out of renting out single-family homes, you will likely have fewer homes to fill, in general, which means you won't have to screen as many tenants. You may be able to continue to do this work yourself instead of hiring a property manager, which is what many owners of larger apartment buildings end up doing.
You can always turn around and sell the homes.
Say you decide you want to get out of the rentals game one day. A single-family home tends to be easy to sell. You don't have to market the home solely to other investors. It could easily be sold to an owner who wants to live in it. On the other hand, a large apartment building is only ever going to sell to another investor, so it may take longer to unload.
Single-family properties are not for everyone, but they can be a good investment option for investors who want the option of selling one day, and for those who don't want to screen a lot of tenants. For more information about finding single-family properties to buy, contact a local real estate agent, like Vickie Gallimore: RE/MAX Central Realty.