Single Family Homes As Rental Properties

Many real estate investors prefer to be buy and hold investors instead of those looking to flip properties. Having rental properties have pros and cons, just like any other type of real estate investing.

Generally, the expenses associated with renting single family homes is minimal. Sometimes you will run into issues that cost you a little more than normal, but that is just the nature of the beast. It is easier than apartment buildings because you have one person, or one family that you have to deal with. You can make the tenant responsible for most of the expenses such as utility bills, broken appliances, and things like that. The idea is to have the person or family renting it feel like the owners. Making the investment as passive as possible.

The biggest con with renting a single family home is the profit is lower. Apartments can give you more bang for your buck as far as profit just from the sheer volume. Acutally, with all else being equal, the biggest factor in your profit potential will be location. The best locations bring you the most profit. People want to live in the best communities and will pay more to do it. Another factor is of course how many people you have on the property. Again, that goes back to volume.

In pretty much all cases, multi unit complexes will give you more return that a single family home. That is just common sense.

Another big disadvantage is that if your single family investment property is vacant you have no income, no cash flow. If you own a multi unit complex and have a vacancy or two you still have some cash flow.