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My Fourth Property

Single Family Homes

8/8/2018

51 Comments

 
I SWEAR.

​When I'm in REAL ESTATE mode...I'm IN REAL ESTATE MODE.

What do I mean by that?

Well, within the last 5 months, I sold a house. I bought a house. I bought a duplex. And now, I'm ready for the next investment.

What's my grand strategy for this next investment, My Fourth Property? To be honest, I'm really not sure yet. I plan to deploy about $25k-$35k for this next investment, so I definitely have options. But again, I need to weigh different strategies.

So let's take a look at the first investing asset class I'm considering: SINGLE FAMILY HOMES

Technically, this is where I have the most experience. Which isn't a lot. But, I've purchased 2 single family homes and also sold one. Let's touch on the Pros and Cons of investing in single family homes.
Picture
My First Single Family

PROS
  • One of the most affordable investments. You can find quality cash-flowing properties for less than $100k.
  • Longer tenant leases. Tenants in single family homes usually stay longer than tenants in multi-family. This might be because there's a higher sense of ownership, and single family properties often attract families, where stability for the kids is more of a priority. Longer tenant leases and less turnover increases overall ROI.
  • Best chance of appreciating in value and holding resale value. Single family properties have a larger buyer pool (which means demand) because you're not only factoring in investors, you're factoring in a large pool of retail buyers. You know...the people that aren't looking to necessarily buy an investment...they're looking for their first house, or to "upgrade," or to find their dream house.
  • Reduced operating expenses. Owning less units often = less expenses. By default, with only 1 unit, you easily should have much lower expenses than a multi-family. That's less toilets to have to fix, less furnaces to replace...

​
CONS
  • Single family properties don't take advantage of the economics of scale. For example: a new roof on a single family house (1 unit) will have a similar cost for a roof on a duplex (2 units).
  • When you have 1 vacancy, you have 100% vacancy. If you're in the middle of turning over your property and it's vacant, you very well might have to pay a full mortgage payment on your own. With multi-family, 1 vacancy hurts, but you should at least have income coming in from the other units.
  • It can be hard to scale with single family homes because of the management and work required to keep the portfolio running smooth. Would you rather own 100 houses? Or one 100-unit apartment building?
  • Opportunity cost....in terms traditional financing. You can only get 10 loans under your name. Do you want to use one of those slots for 1 unit?

Picture
My Second Single Family

As you can see, there are plenty of PROS and CONS to evaluate when buying a single family home. I'll say this: because I started off with this asset class, and a lot of investors do, it's a great way to get started. It's a great way to "ease" into real estate by keeping things relatively simple. I really got my real estate education from single family properties and I'll never forget that!

Key Takeaways
  • Evaluate your investing priorities. Single family homes offer a great option if you're just starting out because they are generally cheaper than a duplex or larger multi-family (if you're looking in a cash flowing neighborhood), they generally have longer tenant occupancy rates, and they hold resale value (if you buy in the right neighborhood).

​-Tyler
Next Post: Small Multi-Family
51 Comments
Angela Waterford link
5/21/2019 03:22:03 am

I think I will buy a single-family home because it's one of the most affordable investments out there. Thanks for letting me know that buying it is a good move because it has the best chance of appreciating in value. Since there would be fewer expenses to this as well, I will consider looking for a real estate company and buy this from them.

Reply
Tyler from Jump In Real Estate link
5/21/2019 11:50:46 pm

Hi Angela,

Single family is a great way to get started in the business and jump start your investing journey!

Be very mindful of location, location, location! And run the numbers! Let me know if you have any questions!

-Tyler

Reply
Randy Chorvack link
7/24/2019 12:51:45 pm

It's crazy that you can find some properties for less than $100k! My wife and I have been looking for a new now that we're married. I'll have to tell her the good news.

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Tyler from Jump In Real Estate link
8/29/2019 11:31:49 am

Hi Randy - you're in luck! $100k houses exist!

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Angela Waterford link
7/31/2019 02:18:07 pm

Wow, I never took into account that single-family homes have the best chance in appreciating in value. I think I'll buy one from a real estate company since I want to have a property that has reduced operating expenses. In addition to that, it's one of the most affordable investments as well, so I'll consider this option.

Reply
Tyler from Jump In Real Estate link
8/29/2019 11:33:48 am

Hi Angela - single family houses are a great way to start in the investing world! Learn to analyze, understand your cash flows, and hope for appreciation!

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David Johnson link
8/28/2019 06:45:46 pm

That's really cool that tenants stay longer in single-family homes. Because of this, I think you'd be able to form better relationships with the tenants and things would go more smoothly, in which case you'd have more time. I'll have to look into single-family homes for sale.

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Tyler from Jump In Real Estate link
8/29/2019 11:41:19 am

David - definitely look into single-family. I will say though, generally landlords try to not build relationships with their tenants, and instead hire property management to handle that relationship. I've personally found that to be effective from a business standpoint. Best of luck!

Reply
Jay Jorgenson link
9/13/2019 08:38:05 am

My wife and I want to move away from our current noisy neighborhood. I like how you mention a single-family home for less than $100k. Thank you for the information. I'll contact a real estate agent so they can help me look for the perfect single-family home.

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Tyler from Jump In Real Estate link
10/18/2019 11:59:17 am

You're welcome and I'm glad you found this information valuable!

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Derek McDoogle link
9/17/2019 06:30:28 am

I like how you mentioned that single-family properties have a larger buyer demand. My brother got married a couple of months ago and he wants to start checking houses to buy his first property. I will share this article with him so he is aware of the benefits of getting a single-family house such as reduced operating expenses.

Reply
Tyler from Jump in Real Estate link
10/18/2019 12:01:55 pm

Glad you found this article helpful!

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Ellie Davis link
10/2/2019 09:12:13 am

It's interesting to know that tenants in single-family homes usually stay longer. My brother is thinking about buying a house, and we are looking for advice. I will let him know about the benefits of single-family homes to help him decide.

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Tyler from Jump In Real Estate link
10/18/2019 12:02:38 pm

Yeah they typically stay longer, but not all the time. Glad you like the post!

Reply
Ron Booker link
10/7/2019 11:46:08 am

I like that you said that single-family homes keep tenants happier for a longer time rather than multi-family homes. I have a friend that thinking about buying a new home and he wants to know what type of home would be the best option to invest in. Thank you for helping me learn more about single-family homes, I'm going to let my friend know.

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Tyler from Jump In Real Estate link
10/18/2019 12:03:17 pm

You are welcome and thanks for reading!

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Derek McDoogle link
10/16/2019 09:32:00 am

My sister told me that she would like to buy a house since she is a single mother and has been saving money for the down payment. I like how you said that single-family homes have a best chance of appreciating in value and holding resale value. I will share this article with her so that she can have a better idea of what type of house to look for.

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Tyler from Jump In Real Estate link
10/18/2019 12:03:44 pm

Thanks for sharing! And thanks for reading!

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Ron Booker link
10/17/2019 01:46:14 pm

I like that you said that you can find single-family homes for sale in the 100k range value. I'm going to talk to my wife about buying a single-family home instead of a condo. Thank you for helping me learn more about single-family homes.

Reply
Tyler from Jump In Real Estate link
10/18/2019 12:04:08 pm

Glad you found this post valuable!

Reply
Shaylee Packer link
2/6/2020 05:50:33 am

You mention that renters tend to stay in single family homes longer then multi family homes. My brothers' family is looking for a place to rent that they will be in for awhile. I think, as you mentioned, a single family home might be the best option for them.

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Tyler from Jump In Real Estate link
5/16/2020 12:37:44 pm

Yes, single family homes offer a little more benefits than multifamily...usually yard space, more square footage, neighbors that aren't right on top of your living room!

Reply
rachel frampton link
2/10/2020 01:50:34 am

I've been wanting to buy a single-family home since its size is enough for me and my two kids. It's great to have learned that single-family homes have lower expenses than a multi-family. Also, just in case I plan to sell it off, it's great to know that this type of property has a larger buyer pool.

Reply
Bob Newton link
2/13/2020 08:43:58 am

It's good that you point out that single-family homes tend to appreciate in value. I've been looking for a good way to invest my savings, so I'm considering buying a single-family home. I'm going to look for a good real estate agent in my area that can help me buy a single-family home.

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Sabrina Addams link
2/28/2020 02:36:24 pm

I liked that you said there is a higher sense of ownership in living in a single-family home and that they hold resale value well. My nephew, his wife, and their 2 kids are looking to move out of their condo and into a single-family home sometime later this year. It sounds like looking for some in Brownsburg, IN now could help them.

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Zachary Tomlinson link
3/10/2020 07:32:02 pm

Thanks for helping me understand what single-family homes are! My mom suggested that I purchase a single-family home for myself since I've been thinking of leaving our home for good. What you said about how it has a huge demand if ever I decide to sell the home is indeed very interesting. I should go and talk to my friends about this if investing in single-family homes is indeed a great idea.

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Conrad O'Connor link
4/9/2020 01:10:39 pm

It's good that you point out that buying a single-family home can be a great way to invest your money. I've been looking for a way to invest my savings, so I'm considering purchasing a single-family home to rent to people. I'm going to look for a good real estate agent in my area that can help me buy a single-family home.

Reply
Derek McDoogle link
5/6/2020 12:09:10 pm

My uncle told me that he would like to invest some money in a business that can let him more money. I like how you explained that single-family homes are a good option because normally they get good appreciation. I will share this article with him so that he can decide whether or not he buys homes to rent out.

Reply
Tyler from Jump In Real Estate link
5/16/2020 12:40:28 pm

Thanks for reading and sharing with your Uncle! Let me know if I can help answer any questions!

https://www.jumpinrealestate.com/ask-tyler.html

Reply
Nelson Fogerty link
5/7/2020 08:37:21 am

It's good that you point out that a single-family home is a great asset in which to invest your money. I've been looking for a way to invest my savings, so I'm considering buying a single-family home. I'm going to look for a good real estate agent in my area that can help me purchase a single-family home.

Reply
Tyler from Jump In Real Estate link
5/16/2020 12:39:33 pm

AWESOME!

Let me know if you have any questions I'm always there to help. You can contact me here: https://www.jumpinrealestate.com/ask-tyler.html

Reply
Alec Burns link
5/12/2020 09:15:32 am

It's good that you point out that buying single-family homes is a great way to invest your money. I've been looking for a new asset to expand my investment portfolio, so I'm considering buying a single-family home. I'm going to look for a good real estate agent that can help me buy a single-family home.

Reply
Tyler from Jump In Real Estate link
5/16/2020 12:38:33 pm

Yes! Buying a rental property is a great way to start building your financial future!

Reply
Franklin White link
6/12/2020 11:33:19 am

I like how you said that single-family home tenants usually stay longer than multifamily ones do. I want to get into real estate. I think I'll buy a single-family home and rent it out to a some people because the tenants will most likely stay longer.

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Greg Hampton link
8/4/2020 07:26:00 am

I like what you said about investing in single-family homes since they can get your cash-flow. My sister wants to start investing in real estate in the coming months. I'll share this information with her so that she can look into her options for professionals who can help her with this.

Reply
Conrad O'Connor link
8/10/2020 11:09:17 am

It's cool that this article mentions that single-family homes tend to appreciate in value over time. I've been wanting to invest in real estate for a long time, so I'm considering buying a single-family home soon. I'm going to search for a good real estate agent in my area who can help me buy a single-family home.

Reply
megan alder link
8/12/2020 08:19:52 am

My husband and I have been thinking about starting investing in properties to be able to make more money, but we think we don't have enough money yet. I found it very interesting to know that investing in a single-family home is one of the best first investments you can make when you don't have millions to invest due to you can buy one of them for less than $100k. I will definitely consider what you recommended and I will make sure my husband knows about it too so that we start seeking for a real estate agent.

Reply
Kristofer Van Wagner link
9/3/2020 11:58:50 am

I like that this post mentioned single-family homes are excellent investments. The other day my parents-in-law asked about investment purposes. I will mention to them about real estate investment.

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Franklin White link
9/14/2020 09:24:06 am

Thanks for sharing how a tenant will usually stay longer in a single-family home. I really want to get into residential real estate. I don't have enough to build an apartment complex so I'll get some single-family homes that a bunch of tenants will stay in until I have enough for an apartment complex.

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Taylor Hicken link
9/17/2020 01:29:12 am

Wow, it's interesting to know that single-family home usually has longer tenant leases as it often attracts families with kids. Moreover, it is one of the most affordable investments where it is easy to find quality cash-flowing properties for less than $100k. I would like to think if someone who is interested to invest in properties, he should consider getting single-family houses which are affordable and have longer tenant leases.

Reply
Fred Gibbons link
9/18/2020 08:52:00 am

It's interesting that you mention that single-family homes can be a great long-term financial investment since they tend to appreciate in value over time. My wife and I have been looking for a good way to invest the money that we inherited from her father, so we are thinking about buying a single-family home with it. I'm going to look for a good real estate agent in our area that can help us purchase a single-family home.

Reply
Jonathan Hansen link
10/26/2020 12:55:07 pm

It's interesting that this article mentions that single-family homes have a high likelihood of appreciating in value if you buy one. I've been looking for the best way to invest the money that I have saved, so I'm thinking about purchasing a single-family home. I'm going to search for a good real estate agent in the area that can help me buy a single-family home.

Reply
Kristofer Van Wagner link
11/12/2020 08:25:14 pm

I appreciate that this post shared that single family homes are a good investment as they are affordable. The other day my sister mentioned that she would like to look into investment opportunities. I will ask her to consider single family homes.

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Zoe Campos link
11/15/2020 04:07:05 am

Thanks for letting me know that I'll be able to find tenants who would stay for a longer lease if I were to invest in single-family homes. I thought that rental properties can be a good investment, but I'm not sure if I'll go for a house or an apartment complex. Now that I've read your article, I'll probably be able to enjoy higher profits if I'll go with the former.

Reply
Adam Golightly link
12/18/2020 04:42:13 pm

My brother has been thinking about buying a single-family home. He would really like to get some help from a professional. I liked what you said about how it can be a more affordable investment.

Reply
Kristofer Van Wagner link
12/30/2020 04:08:22 pm

It never occurred to me that single-family homes are immensely affordable investment, especially for those who are just dipping their toes in investing. My friend said that he would like to diversify his income through investment. I will advise him to look into single family homes.

Reply
Chris Pederson link
4/6/2021 02:42:02 pm

It's good to know that single-family home tenants tend to stay a bit longer than tenants in other properties. Maybe I can buy my own someday and then rent it out to people. Then I'd have a ton of passive income coming in each month.

Reply
Kristofer Van Wagner link
4/12/2021 09:49:34 pm

I do find it appealing that this post pointed out that single-family homes are ideal as investment. My wife mentioned that she is looking at real estate investment. I will advise her to look at single-family homes.

Reply
Ella Starr link
5/19/2021 11:58:19 am

How helpful that you mention that single-family homes are one of the most affordable investments. My husband and I want to purchase a second home to rent this summer. We will look for a great single-family home realtor in our area.

Reply
kate hansen link
7/28/2021 03:20:38 pm

It's good to know that single-family homes are affordable! My husband and I are wanting to look into finding our very first home to move into in a couple of weeks, and we want to make sure that we can find the right one for us. I really appreciate you helping me learn more about the benefits of single-family homes! We'll have to look into finding one to move into in the future.

Reply
Mortgage Broker in Sydney link
5/31/2022 08:32:30 pm

Great tips provided. Thanks a lot.

Reply



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