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Single Family Homes for Investments

Why single family homes? There are two good reasons. Of all real estate vehicles, single family homes are the easiest to rent and the easiest to liquidate and get your cash out. If you need to get your money out of a real estate investment, it will take the least amount of time with a single family house.

Unlike apartments or commercial properties, there are more buyers for single family homes. Buyers are either looking for homes to live in or they are looking for homes to buy and rent. Buyers looking for homes to live in can make the purchase with 3% to 5% down payment plus closing costs. Investors wanting to purchase single family homes are looking at 15% down payment plus closing costs. With either type of buyer the cash required by the banks is less than what is required to purchase apartments or commercial property.

Generally speaking, the best price range for single family rental properties is in the lower end of the market you are in. Look for two to three bedroom homes listed at a price which will allow you to rent them at a competitive rate in your market and have the ability to pay all its expenses (real estate taxes, insurance, maintenance and debt service) and give a return on your investment. Another big consideration to look at when determining what to buy is how much money and work will go into the property in order to get it in rentable condition.

Two to three bedroom homes are in greater demand, rent easier and get higher rents than apartments. The trade off is the economies of scale, the numbers work better the bigger the apartment complex and the more units involved. If you are thinking about purchasing income producing real estate as an investment, single family homes is a great place to start. They are easy to get into, usually quite a few to choose from, they are a relatively safe investment and you can get out of them if you need to. Single family homes offer real estate investors a solid foundation.

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