If you want to invest in a buy-to-rent property, one of the first things you need to do is to evaluate the pros and cons of the different property types available. This will help you decide on the best investment for your situation. Here is an overview of the pros and cons of buying and renting out a single-family home; it will help you with the analysis.
Long Lease Periods
Those who lease single-family homes tend to go for longer leases or live in those properties for longer periods as compared to those who rent, say, apartments. One reason for this is because most people who rent single-family homes do so because they have families and crave spacious homes. Some of them are even saving for a home purchase, which might take some time.
Whereas a typical single-family house is likely to be bigger than a typical apartment, when you consider the property as a whole, the single-family home will be smaller. Buying an apartment block with several houses will cost you more money than buying a single-family house.
Although both big and small houses have their pros and cons, most people actually love to live in big homes. Since a typical single-family home is more spacious than other properties, it is likely to attract more buyers.
Vacancy Means Zero Return
If you only own a single-family home, then it means you only have one tenant, and you will be tenantless if they leave. This means whenever your tenant leaves, you will be without your regular rental income until you find a replacement tenant.
Another disadvantage with single-family homes is that they tend to have fewer amenities than other types of properties. The main reason for this is that, with the other properties, tenants or homeowners can share amenity costs. However, if you have a single-family home, you will have to bear the cost of installing and maintaining them on your own. The lack of amenities may put off some tenants.
High Maintenance Costs
Lastly, you should know that a single-family home is likely to require more maintenance costs than other properties. Again, this is typically because you have to take care of all the maintenance costs on your own. In other properties, say a condo, the association shoulders some of the maintenance costs.
Whatever type of property you settle on buying, don't forget to use a realtor to hold your hand through the process and help you protect your investment. For more information on single-family homes for sale, contact your local real estate group.