Single-family investment properties are the most common type of real estate investment. However, there are some pros and cons to consider before buying. To learn more about it and to find out if it is the right niche for you, check out our latest post below!
If you are thinking about making a real estate investment, you might automatically think of buying a single-family home. While this is an excellent choice, there might be a few things you haven’t thought about. As buyers and sellers of Chicago real estate, we have put together a list of things you may not have considered. If you have any questions about investing in Chicago, please reach out to us any time!
Single-family properties will likely appreciate over time, they will hold their value as opposed to rentals which tend to fluctuate a bit more. There is always a demand for single-family homes as opposed to other types of real estate. If you decide one day that you want to sell, the odds are you will make a profit and have a much easier time selling than you would with other types of properties. If you want to walk away from the property at any time, you can. Or, if you decide you want to live their yourself, that option is always there for you too!
Single-family homes typically have lower property taxes than their multi-family counterparts. This will allow you to keep more cash in your pocket each month, without having to worry about excessive tax bills.
People renting a house as opposed to an apartment tend to stay a bit longer. They might be saving up for a home of their own or they have a family they don’t want to move around. Having tenants in place, without any vacancy will greatly improve your ROI. When you have good ones living in your home, it makes your job as a landlord easy. Be sure not to give them any reason to move!
There isn’t much maintenance of the standard single-family property. So long as things are all in working order when you rent out the house, the tenants you have in place should take good care of it if they want to see their deposit back. And if they don’t, it can be a violation of their lease, resulting in eviction.
If you lose your tenant and aren’t able to find another one, your income from the property will be zero. Plus, you will have to pay the expenses the tenant usually pays for such as power, water, and other utilities. After all, the lights need to be on if you are going to show the property to other prospective tenants. This is the risky park of only owning one rental property. However, it shouldn’t dissuade you from buying, just make finding great tenants your #1 priority.
Depending on the community, there might be HOA fees to contend with. These can rise over time, so make sure you have a true understanding of the costs and what the HOA will cover. There can be special assessments added as well, so be sure to keep up with what is going on if you do not live within the HOA’s jurisdiction. Your tenants will also need to abide by the rules of the HOA. If they are in violation, it can come back to bite you.
Single-family homes in Chicago are a wonderful way to add value to an investment portfolio. Luxdoor Invest can help with your questions as well as show you some of the best rentals in town!