5 Notable Advantages to Investing in a Single-Family Home
As with all of your real estate portfolio investments, the type of properties you invest in, be it condos, multi-family, mixed use, or single-family homes, typically depends on the property location, market conditions, and projected return on your investment.
While many real estate investors consider all types of properties, some of the relative advantages to investing in single-family homes include:
- Appreciation Potential – Single-family homes tend to appreciate more than condos, partly because people have a hard time envisioning paying a higher sales price for a property where they may have to pay additional regular maintenance fees. Many homebuyers would rather put that money into home improvements of their own choosing.
- Fewer Rent Limitations – Tenants interested in renting something other than an apartment are accustomed to mowing the lawn themselves, taking the trash to the curb, and the like. It is normal for them to pay rent and take care of these other tasks personally. Renters are not likely to understand paying a higher rent to cover your condo fee. Tenants will expect that if your condo is the same size as a single-family home down the street, and of the same quality, that the rent should be the same.
- Fewer Outside Restrictions on Use – Condo association rules may make it more difficult when renting your condo unit to others, based on current unit rental occupancy in the building.
Homeowner associations are traditionally known for having fewer restrictions regarding the use of your property, as long as you are abiding by the covenants.
- Fewer Outside Fees – There’s no getting around it: Condos typically cost more to own than a single- family home of the same size. Not to mention, condo fees (both monthly membership fees and special assessments) are subject to increases, potentially raising your cost burden over time.
- Financing Options – In today’s market, lower interest rates and higher loan-to-value (LTV) ratios can be obtained easier and faster for single-family homes.
Published In: B2R Finance