The housing market offers real estate investors a variety of income properties to invest in. Regardless of your budget or real estate investment strategy, you are guaranteed to find something that suits your needs. This wide range of options includes split level homes. These properties were a staple of American suburbs for decades. More importantly, they have become the subject of increased interest in recent years. So what is a split level house? What do you need to know when buying a split level house? And are split level homes a good investment? This guide will demystify these income properties and highlight the benefits of investing in them.
The Definition of Split Level Homes
Before delving into split level house investing, we must first define what it is. In simple terms, a split level house is any real estate property that has staggered floor levels. These properties generally have two short sets of stairs: one that leads to the bedroom and another to the basement. A modern split level house comes with a finished basement that can serve multiple purposes. In fact, it is not unusual for this area to have a laundry room or even an extra bedroom.
The key feature of a split level house is that none of its floors cover the whole footprint of the investment property. For example, certain split level house designs have a main floor that only contains a kitchen, a dining room, and two staircases. This is in stark contrast with other types of homes that feature overlapping floors.
The Different Types of Split Properties
Split level homes come in a wide array of designs. It is important to note that a split level house does not necessarily consist of three floors. In fact, some designs can have up to 5 different levels. This makes split level homes perfectly suited for various real estate investment strategies. In any case, here are the two main types that you are likely to encounter when investing in real estate.
Related: Types of Properties That Can Be Used as Short-Term Rentals
1- Side split house
This is a very common architectural style of split level homes. In this configuration, the multiple levels of the investment property are only visible from the front elevation. This design is quite convenient since it creates a separation between the bedroom area and other parts of the house without requiring a full set of stairs.
2- Back split house
Unlike the side split house, only one level of a back split design is visible from the front elevation. As for the other two levels, you can only see them from the sides. This style of property is very common in rural areas.
Now that we discussed the basic characteristics of the split level house, let’s examine its potential as a real estate investment.
Investing in a Split Level House: What You Should Know
Like we mentioned above, these types of real estate properties seem to be gaining some traction lately. Here are some points to keep in mind when exploring the possibility of investing in a split level house.
1- Millennials are driving demand for split level houses
One of the most interesting real estate trends in recent years has been the huge impact that millennials have had on the housing market. Their peculiar preferences, in particular, have contributed to a renewed interest in a slew of architectural styles that have fallen out of favor. A prime example of this is ranch-style homes. Since millennials are expected to become the dominant force in the housing market, demand for these investment properties will continue to trend upwards. Investing in a split level ranch house might be the timeliest investment decision that you could make right now.
Related: The Millennial Effect on the Real Estate Market
2- Property prices are still relatively low
While demand for these investment properties will inevitably increase in the coming years, property prices are still fairly low. This gives you the unique opportunity to snap up a split level style house at a bargain price and ride the bullish momentum when property value begins to rise. Needless to say, renting out a split level house while its value increases exponentially is a real estate investment strategy that can net you a considerable return on investment.
The low prices of these investment properties coupled with their efficient design means that real estate investors are getting more value for their money. Compared to a standard design, a split house gives you an extra floor as well as room for extra storage in the basement. You are essentially getting more square footage without incurring any extra cost.
3- Open floor designs are going out of style
Another trend that bodes well for split level house investments is the decreased interest in open floor plans. Despite dominating the housing market for decades, buyers are starting to opt for more compact and well-defined properties. While spacious, open floor homes are more difficult to decorate and furnish. This makes them ill-suited to the needs of millennials who prefer properties that are easy to personalize.
How to Find a Split Level House for Sale
Finding a split level house rental to invest in is not always easy. While these investment properties are slowly making a comeback, they are far from being the dominant style in the market. Fortunately, there are various tools that can help you find a split level house in any location. A perfect example of this is Mashvisor’s very own Property Finder. Thanks to a high-end algorithm and a set of advanced features, you will be able to find suitable real estate investments in a matter of minutes!
Another option that is worth considering is the Mashvisor Property Marketplace. This tool gives you access to hundreds of off-market listings and will help you connect to anyone who is selling a split level house outside of the MLS. Everything from multi-generational homes to back split houses can be found on the platform. Start your 14-day free trial with Mashvisor and subscribe to our services with a 20% discount after.
Related: What Are Off Market Properties? How Can You Find One?
The Bottom Line
In light of what we discussed in this article, it is easy to see that split level houses are making a strong comeback. Putting up a split level home for rent or investing for appreciation are highly recommended approaches if you want to capitalize on this trend.