You must have heard plenty of times that you should invest in single family properties. In fact, this is true. Therefore, let’s talk about the reasons why single family properties are one of the best investment properties. Moreover, we are going to tell you what actually makes for the best single family homes for rent.
In real estate, a single family home is a house that stands alone. Or in other words, it is a detached house. It has a separate entrance as well as other separate facilities.
Related: Invest in Condos or Single-Family Investment Property?
First: Why invest in single family properties?
More cash flow: When we say more cash flow, we mean that you will have fewer expenses on one property. Therefore, it will leave you with more money for yourself. This also means that the loan payments are going to be less as well as skipping management fees, which is also considered a part of an investment property’s expenses.
Faster appreciation: Single family properties appreciate faster than other types of properties. This feature makes them worthwhile. Therefore, if your goal is to benefit in the long term and not only in the short term, then go ahead and try single family properties.
Tax deductions: This type of properties are subject to tax deductions. These deductions apply to the repair expenses as well as the loan interest. Therefore, you can take advantage of that and enjoy more cash flow.
Easy financing: Mortgage brokers tend to have easier requirements for single family properties investments. This includes a good amount of money, in addition to longer payment periods!
Easy management: It is always easier to manage a single family property than managing other types of properties. Considering all the tasks included in property management, going with a single family home is the best option, especially for beginner real estate investors.
Fewer tenants to deal with: The nightmare of most landlords are tenants! It is a given that dealing with one tenant is much easier than dealing with multiple tenants. Therefore, if you want to save yourself the pain of dealing with multiple tenants, then single family properties for rent are the way to go!
Second: What makes for the best single family properties for rent?
Sure enough, there are some features that make for the best single family properties for rent. In order for you to make the best out of your investment property, here are some tips to follow:
Learn to identify profitable single family properties
First of all, as a real estate investor, you must learn how to identify a profitable investment property. This is crucial in order for you to have a positive cash flow. The procedure is simple; however, it does not mean that it is easy. Here is what you need to take into consideration when buying single family properties to rent:
Calculations: Dealing with numbers is vital to this process. First of all, you will have to learn to use the investment property calculator. It will help you estimate the return on investment expected from the investment property. These estimations include capitalization rate, cash on cash return, a property’s cash flow, net operating income, etc. You must keep in mind that these basic metrics are important for the process of performing a real estate market analysis. In addition to that, it will help you perform accurate investment property analysis.
Related: Beginner’s Guide to Comparative Market Analysis
Physical features: Now, let us take a look at the physical features that make for the best single family properties for rent. First, you will have to take location into consideration. The tool that will help you with that is the investment property calculator along with the real estate market analysis. It will help you find the hottest locations for your investment properties.
You must also consider the job market. The best investment properties tend to be in the hottest job markets. So, you should keep that in mind. In addition to that, facilities and amenities are important. Check out the surroundings of the property. Look for schools, gyms, shopping malls, public transportation, and so on.
Another thing to take consideration is the crime rate. Make sure your investment property is located in a safe area. You have to take that into consideration, especially if your tenants are going to be families with kids. A dangerous area will also affect the market value of your property, therefore, you will be the one losing the money.
Proper property management
Another tip that will help you maintain the best single family properties for rent is management. A proper property management strategy will get you a long way in real estate investing. You must know that there are two ways to do so; you either hire property management professionals or do it yourself.
Though both options are equally great, you must take into consideration two aspects:
First, hiring a property management will require paying management fees, which means setting aside extra expenses. Therefore, if you want to reduce your expenses, you should do it yourself. Second, you will have to consider all the tasks that come with property management, from rent collection, through dealing with tenants to rental arrears, paperwork, and administration. It all requires you to be available at all times. It also requires some experience in real estate investing. Third, you will have to take into consideration your tenants. If you are renting out to family or friends, then you might want to hire a professional property management firm to deal with them in order to avoid any uncomfortable situations.
Related: Become an Expert on Financial Planning for Real Estate Investments
Some investment properties are better than the others depending on what you are aiming for. After all, it all begins with your decision. Still, if you want to learn more about buying rental properties, check out Mashvisor. You can learn from our blogs as well as find the best rental properties for sale including a multitude of single family properties.