Any real estate investor wanting to make a mark in real estate needs to invest in the best real estate investments. One of the best real estate investments, without any doubt, is a single family investment property. Why are these types of real estate investment properties among the best real estate investments? There are seven main reasons: high demand, high supply, inexpensive property prices, easy financing, less property management, investment strategy versatility, and profitable rental income and appreciation.
Investing in Single Family Homes: Very Desirable Among Renters
The numbers don’t lie. Many Americans are choosing to reside in single family rentals (SFRs). According to the National Rental Home Council, single family properties consist of about 40% of the total rental market and 13% of occupied properties. Who wouldn’t want to live in a single family investment property? SFRs offer more privacy and space compared to other types of real estate investment properties.
These statistics are consistent with the fact that many tenants are ditching the cities for the suburbs, which are where most SFRs are located. The demand from tenants is a significant factor when considering where to purchase property as a real estate investor. Therefore, strap up and go find single family investment properties for sale in your location! Use Mashvisor’s single family investment property search engine to get you started!
Investing in Single Family Homes: High and Rising Supply
The most basic economic principle falls in line with single family properties. There is a high demand to live in SFRs, which leads to a high supply of these types of real estate investment properties. The available data reflects this fact. There has been a mind-boggling 70% increase in SFRs since 2005, with over 17 million single family homes present today. The rate of construction of single family homes, as reported most recently in December 2017, was 5.3%, the highest since over ten years ago. Such high supply has made investing in single family rentals very attractive to every real estate investor.
Investing in Single Family Homes: More Affordable Than Other Properties
Investing in single family rentals as one of the best real estate investments wouldn’t be complete without mentioning its affordability, and indeed SFRs check this box out nicely. In part due to high supply, single family properties are generally less expensive than other types of real estate investment properties. Another factor is that SFRs have less square footage since they are smaller than other properties, such as multifamily homes.
Because of their low property prices, investing in single family rentals is popular for real estate investing for beginners. If you are a new real estate investor interested in purchasing a SFR, click on this link to find single family investment properties for sale!
Investing in Single Family Homes: Simple Property Financing
Another reason SFRs are among the best real estate investments is due to their easy financing. Having lower property prices, as mentioned in the previous point, contributes to simple single family investment property financing. Down payments, for instance, for single family properties are lower than those for other types of investment properties.
Still, the most deciding reason why single family investment property financing is so smooth is that SFRs are low risk investments. As a result, lenders are more willing to take part in single family investment property financing than they are in financing of more expensive multi family properties.
Investing in Single Family Homes: Less Property Management
One feature all the best real estate investments share is efficient and inexpensive property management. By investing in single family rentals, you receive an inherent advantage in this aspect, since SFRs require less property management than other types of properties. Once again, one reason this is the case is because SFRs are small properties and are thus less likely to need a lot of maintenance. Tenants treat single family rentals with more caution and respect compared to apartments. This also leads to less spending on management and repairs. Such little management means a real estate investor does not necessarily have to choose professional property management. Instead, the investor could self-manage, which saves even more costs.
Investing in Single Family Homes: Suitable for Many Investment Strategies
Making money in real estate through SFRs is typically done through traditional real estate. Single family rentals are excellent for this rental strategy, for all the reasons mentioned above. SFRs, however, are not confined to being used as traditional rentals. Like many of the best real estate investments, SFRs can be used for multiple investment strategies. Short-term strategies, such as Airbnb, are also excellent rental strategies for single family real estate investing for beginners and pros.
Investing in Single Family Homes: Major Source of Profit
All the previous features point to the main reason why SFRs are among the best real estate investments: they are very profitable! Investing in single family homes is by far one of the best methods of making money in real estate. SFRs provide very consistent and high rental income because of their exceptional demand. They also offer profit in the form of appreciation, or an increase in property value over time. And like all real estate investments, investing in single family homes allows a real estate investor to claim tax deductions that will certainly translate to saved money.
Overall, single family homes are some of the best real estate investments available. They are extremely accessible due to easy single family investment property financing, high supply and demand, and cheap prices. SFRs are versatile investments that can be used for various investment strategies. They also function as a great entry for real estate investing for beginners. All of these factors combined lead to SFRs being among the best real estate investments for a real estate investor to pursue. To begin making money in real estate through SFRs, start your trial with Mashvisor to search for single family investment properties for sale!