If you plan to enter the landlord business, it can be daunting to know where to start. Should you buy a single home, multiple homes, a duplex or even a building? Many people think that it's best to tip-toe into the landlord waters slowly -- perhaps by purchasing just one single family home -- but there are advantages to starting with a larger investment on a multi-family home instead. What are these advantages? Here are 5 great reasons.
Lower Overhead. Maintenance and repairs can be the bane of a property owner's existence. So, instead of buying 2, 3 or more individual structures, why not buy one structure with 2, 3 or more homes inside it? You have only one roof, one foundation, one set of pipes and wiring. You also have all your tenants in the same area, reducing travel and other costs or aggravations.
Different Market. If the single-family home market is tight, you can often do better by looking for something that most people shy away from: multi-family housing. You may be able to get a better deal, avoid most other investment property buyers and buy in a nicer area than you would if facing stiff competition for the same housing.
Better Cash Flow. A single-family home usually means one set of renters and one payment -- a higher amount of risk, especially for a new landlord. But a multi-family building can provide greater cash flow and a larger income on a more regular basis. If one tenant leaves, there are other rent payments to help keep your books out of the red.
Getting Help. Because you have a larger income from more renters and only one location to worry about, it's more likely that you can hire help to do some of the tasks most small-time landlords do themselves. This can include the ability to outsource daily management needs to a management company, hire landscaping services, or enlist a handyman for maintenance jobs.
Bigger Sales Price. If and when you decide to sell, you're likely to get more out of selling a multiple-family building than a single-family home. Even if appreciation in an area stays at the same percentage for all homes (10%, for example), you can reap much more by having a larger asset to appreciate.
Buying a multi-family unit is, of course, a larger investment with some risks of its own. For this reason, it's good to work with a qualified real estate professional and consult with your accountant and lawyer before deciding on a property. But if multi-family housing is right for your business, it can mean a smoother road ahead for you.
For real estate help, contact a company such as RE/MAX AEROSPACE REALTY.