In this blog, we will be talking about Types of Rental Properties. So let’s talk about it.
are the American dream. They’re the white-picket-fence, big backyard for the family. What more could you want? They’re also the most common and abundant type of property.
- Lots of them everywhere
- Really easy to sell, so you have a solid exit strategy
- Fewer bills are involved since the tenant pays for all utilities; gas, electricity, hydro, water, sewage, garbage
- Insurance and property taxes are generally handled by the landlord
- Easier to finance because they are so common; lots of options for lenders if your credit and income are in check
- A multi-family will call the landlord, while a single-family will call the cops, which might sound bad but what really means is that it is more hands-off
- There are no tenants in the basement and another tenant at the top having to complain about each other
- It can be rented out to families generally speaking, which are pretty trustworthy tenants, not to mention that it is less transitional than an apartment, and is more for those who have settled in
- Single families are directly proportional to the growth of the market
- How is this different from other types of investment properties?
- The advantage of this is that if you time the economic cycles properly, you can buy low and sell high
- Cost-wise, it is cheaper than multi-families or commercial properties, even though it is more expensive per unit, but there is a lower barrier to entry
- Cost per unit is very high in comparison to duplexes, triplexes, and multi-families
- It takes longer to scale
- Limited loans
- Except for about 4–10 maximum amount of properties
- You might cap even earlier because SFRs can raise our debt-to-income ratio really quick
- Can be more expensive rehabs because the tenants have “dug in” more since they feel more at home