What Is a Single Residential Home?
Photo: Single Home (can be 2 storey or 1 storey) Designed and Build by one of our Builders - Metricon.
A single residential home comprises one unit that houses one family. It sits on its own bundle of land, not associated with other private structures. Also known or called as "detached," since they're not connected to another house.
Buying or investing a single residential unit property can yield various returns. There are a lot of factors that are considered to determine success ratios of a rental property.
While there are a lot of property types that a property investor may like, investing in a single residential home - like all other investment properties have its own shares of pros and cons.
Proper evaluation and strategies are required for a long-term successful property portfolio.
Pros and Cons of Single Residential Units
Longer Tenancy Rate
Investors always look for properties that guarantee high occupancy rates. The reason being is, Investing in a property with longer leases can increase the annual return on investment for investors.
Single residential units are rented out for one or more years compared to other residential properties.
Higher Resale Value
Good single residential properties are those that do not lose their value over time.
A single-family home that is located in a booming area and is well-maintained will hold a higher resale value.
Lower property taxes
Compared to multi-family homes and apartments, single-family homes tend to have lower property taxes each year.
Lower costs to manage
Since the majority of the people who rent out single residential homes are small families, the costs of property management can be lower on an annual basis.
You want tenants who can take care of the property. This can lower the number of repairs that are required with every lease renewal.
ROI decreases with vacancies
Single residential homes are vacant as soon as the lease agreement finishes.
Unlike Duplex or Dual key homes that contribute more than one source of income, a single residential home’s return on investment can decrease gradually with vacancies.
It is common to lose revenue while costs increase when searching for a new tenant to occupy your property.
Here’s why a single residential home is a good investment for any conservative property investor
More demand plus high occupancies is an easy formula for high rental income.
More people prefer or can only afford to rent than buy, most of the time their preference is a single residential house..
Another thing to note is that vacancy rates have hit historic lows in recent years. This is important for you as an investor, increasing the likelihood that your tenants will remain in the property and not move out. Single residential homes generally have higher occupancy rates to begin with! So, as a result, even higher occupancies are expected for single family homes.
Cheaper Property Prices
Single residential homes tend to be cheaper than Dual Residential properties.
Even when important factors such as area, maintenance, and age are held constant, single residential homes are set at lower prices. The main reason this is the case is that single residential homes are simply smaller than some other properties.
The lower prices of single residential homes can serve as a great incentive for investors. Since this type of property is cheaper than other properties, they are often easier to purchase.
Lower prices also mean that obtaining a bank loan becomes easier. This is great for all investors, but young investors in particular. By investing in single residential homes, younger investors find a great opportunity to get involved in property investing.
Value, Liquidity, Buyers
Even if you plan on not renting long-term and want to sell your property, investing in a single residential house is a great choice. For instance, they have great liquidity; they can sell relatively quickly, even in a slow market.
As a result, more prospective buyers will be in the market, wanting to purchase the property. Single residential houses also have a high value. They appreciate faster than other types of properties. Whether you’re counting on rent or appreciation from your investment, single residential homes can do it all.
Again, this information is here to help you with your research. The type of property you invest will still depend on the type of property investor you are.
Here at Positive Income Properties - we source the right property deal based on what will work for our client. We are involved in every step of the way - (from sourcing to financing, and finally turn-over and renting the units!). Regardless if you are a seasoned property investor, a beginner or simply wanted your 1st home - we will assist you. We secure tenancy from the onset of the turn-over, please refer to our 1-3 Year Rental Guarantee HERE.
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