Choosing an investment property can be a daunting task, especially for a first-time investor. Single family homes are often a starting point for investors looking to begin their portfolios or those interested in acquiring an investment property that is quite reasonable to purchase and manage. Single family home investment properties are real estate residential properties which consist of one unit rented to just one family.
The following are important things to consider when thinking of purchasing a single family home for an investment property. The below can help you decide if a single family home is a good investment property option for you based on your capabilities and goals:
Tenants of a single family home investment property
When considering tenants for a single family rental property, it is likely you will be able to attract renters that are more long-term than renters in a multi-family home. Single family homes typically attract couples or families and multiple family dwelling together can be quite financially stable and reliable tenants. Something to consider when renting your entire nest egg to one family is that, if those tenants leave, they are your only income from that property and you will have to act quickly to fill the space. More frequently, a family living in your rental property is more likely to care for the home. It’s common for a family to want to stay in one place for a longer period of time and make it feel like home.
Purchasing and selling a single family home investment property
Single family properties are quite easy to find on the market and can be fairly simple to finance in comparison to a multi-family home or a property with several units. Not only are they easier to find for sale, they are also easier to sell because single family homes do not require a very unique buyer. A single family home can sell quickly because you don’t need to find an investor to purchase a property that is suited for couples or an average family. Because single family homes most likely will be less cash flow yielding than a property with multiple rental units, it can be tricky to find a single family home investment that will cover your full expenses including your mortgage, utilities and taxes. A single family home may be less cash flow yielding, but is usually more of a marathon than a sprint and can offer more end of term yield.
Management of a single family home investment property
Regardless of the investment property that is right for you, management of your property will be an integral part of being a successful real estate investor. A single family home as an investment property can be manageable without hiring a property management company to work on your behalf. Professional property management companies can carry high fees therefore managing the property on your own can be a big money saver. With very few tenants to keep happy, be accountable to and oversee, single family home investments are a good option for first-time investors to learn the ropes of owning and managing a rental property.
Locations of single family home investment properties
Single family homes are less readily found in the downtown areas where it is more typical to find multi-family dwellings such as duplexes, triplexes and multiplexes. Regardless if you find the ideal rental property closer to downtown or in more residential suburbs, having criteria for a property with potential for appreciation and a good projected cash flow is an important start to your search. Refining your search to neighbourhoods where the demand for rental properties is high is fundamental in ensuring you have plenty of renters at your fingertips to choose from. A real estate agent will be a key player in finding the right neighbourhood for an affordable single family home with plenty of favorable tenants available.
Our team at Sylvain Bourgon Real Estate have experience in all different types of investment properties whether it’s been in personal investments or facilitating successful investment property purchases for our clients.
If you are seeking buying an investment property in the Ottawa area, or have more questions for us, we are happy to provide you with helpful guidance and support. Email us at info@buyandsellottawa.ca or call us at 613-590-3036.