When you mention the term “landlord” to someone, they generally are going to imagine a person who owns large multi-family properties. But many landlords, including myself, own a significant number of single-family rental properties. In fact, I know some landlords who would never touch a multi-family property.
Single family properties can make great rental properties. But, just as with everything else in life, single family properties have their pros and cons. Here is a short list.
Single Family Rental Property Pros
- There are fewer expenses as tenants tend to be responsible for yard maintenance and all utilities.
- Tenants tend to stay longer in single family homes. Single family tenants tend to be in that stage of their lives when they are more settled, often with kids looking for a good school. As I have said before, turnover is a cashflow killer, and turnover will generally be reduced with a nice home and good tenant screening.
- A single family home can be sold at a retail price, giving you another potential exit strategy for the property. Generally, the only person who is going to buy your multi-family property is another investor.
- Your potential buyer base is much broader with a single family home. There are simply more folks out there who can and will buy a single-family homes as opposed to multi-family. So you will have an easier exit if you need it.
- You may not be expected to furnish appliances. Many single family tenants have their own appliances.
- Lower property taxes. Here in Tennessee, all non-owner occupied multi-family residential properties are assessed at a higher rate for property tax purposes.
Single Family Rental Property Cons
- When tenants move your vacancy rate is 100%. When a single family home is …read more