Why You Should Invest In Single Family Homes Instead Of Apartment Buildings
Posted on: 18 October 2021
You may be looking into entering the real estate industry as an investor and wonder whether you should opt to buy an apartment building or stick with single-family homes. While they both have their advantages for investors, apartment buildings come with a higher risk and are often overwhelming to first-time investors.
If you are just beginning to invest in real estate, single-family homes might be the better option for you. Here are some reasons why you should invest in single-family homes instead of apartment buildings.
Single Family Homes Are More Affordable
Unless you have a lot of money or capital you can spend on an apartment building, single-family homes are the more affordable option. In many areas, it's possible to buy a single-family home for lower than market value if you are willing to do some renovations and repairs to the home. These renovations and repairs will also be a lot cheaper for a single-family home than for an apartment building.
You also will not need as large of a downpayment when you buy single-family homes either. This means, it's possible you can afford to buy the home using your own finances and through your existing lender or bank instead of having to get a business partner to help with the purchasing cost of an apartment building.
They Are Easier To Maintain
Large apartment buildings or even duplex-style apartments will require more work and repairs than single-family homes will. This is because it's a larger building with multiple units where things can go wrong that need to be fixed. The outside of the building needs to be maintained too, including cutting the grass, repairs, and fixes to the exterior of the building. These repairs and fixes could be expensive and take up a lot of your time unless you hire a property manager.
Single-family homes are easier to maintain and repair than apartment buildings are. There is only one tenant at the home who may need you to have broken pipes fixed or repair cracks in the wall. Single-family homes' lawns are typically smaller than a larger apartment building so it's easier to cut the grass or have your tenant take care of it.
They Are Easier To Finance
It can be difficult to get financing for an apartment building, especially for first-time investors. You may only have your personal home to use as collateral and may not have an established business presence so banks or lenders may not trust you with that amount of money.
Single-family homes are easier to finance because you typically only need a good credit score, reliable income and potentially collateral, such as your existing home, to get a mortgage from the bank or other lender.
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