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5 FAQ When it Comes to Investing in Single Family Properties

5 FAQ When it Comes to Investing in Single Family Properties

On average, the U.S. housing market has always been relatively stable with increased residential construction activity and high demand.

In 2015, 36.97 percent of all household units in the U.S. were occupied by renters, and this figure was the highest since 2005.

At this rate, property investors can feel confident about the real estate market and venture out to buy or build new units.

When deliberating over the ideal property type, it is important to consider the essential FAQ when it comes to investing in single family rentals (SFRs).

Check these out:

1. How big is the residential housing market?

As of 2016, the number of single-family units accounted for about 35 percent of the rental market.

With an average value of $150,000 per unit, the whole market could be over $3 trillion in value.

These figures mean that the demand from renters for rental units is high. Keep in mind that there are people who are converting their primary residences into rental units.

Typically, the single-family market offers an opportunity for any starting investor to grow. With increased home searches, you can invest in single family homes with a positive move.

2. Why should you consider SFRs?

When starting out in the real estate market, many investors usually weigh the viability of investing in single-family properties or multifamily units.

Single-family properties offer an ideal way to make your first move into the housing market. People usually have their own reasons for choosing SFRs, so it’s wise to have yours.

Generally, SFRs are popular because they offer privacy, and that’s one of the factors people consider when looking for rental units. They are also inexpensive to buy and usually have a higher appreciation value.

Moreover, it’s easy to finance single family homes with options like 30-year amortized loans.

3. Where should you buy?

First, it is wise to buy property in an easy-to-reach location; an option within an hour drive from your home will be great. But that’s not the only deciding factor.

If you are looking for moderate property taxes, find a location with low crime rates, one with growing job market, a school district or a neighborhood that is home to plenty of amenities.

Take adequate time to learn and understand the community. Find out how the local schools rank and determine whether the distance from the property to the closest town or city is reasonable.

Or, simply take an exploratory walk in the neighborhood and rate the area yourself.

This is an important FAQ when it comes to investing. So always consider it!

4. Should I renovate a home after buying it?

Many investors consider renovations for two main goals: To make the rental attractive to renters or to increase the rent.

Whatever the reason, it’s wise to look at your options by inspecting the home. In some cases, investing in a property upfront is a good idea as it allows you to update it with all the essentials.

For an entry-level single family unit, renovations may cost between $3,000 and $15,000. A house can benefit from aesthetic improvements such as new appliances, new carpet, and a fresh paint job.

5. Should I use a property management company?

For many fast-time property owners, managing your own properties can be challenging. Unless you are a seasoned real estate professional, getting a hand sometimes can be detrimental in learning the ropes.

A typical property management company will do most of the things, if not all, on your behalf. They will advertise units, set and collect rents, deposit money to your account, maintain your property and vet potential tenants.

If that sounds appealing, then it may be a wise decision. Keep in mind that property managers will also be beneficial in handling any tenant’s complaints too.

Consider all FAQ when it comes to investing

When investing in single family homes, take the time to review all the important questions and determine your next move.

Weigh the options you have and when you feel you are set, make a go of it.


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