Single family rental houses can be a great investment. Today, we’ll discuss four great reasons to invest in single family homes. They can be easy to find, simple to manage, easy to sell and they’re great wealth builders. If you’re committed to a long term investing strategy this may be the investment for you. It’s an established fact that investment real estate is a great way to build wealth.
They’re Easy To Find
Single family homes can be a great investment because they’re relatively easy to find. Most housing is single family. In my county there are currently 3 multi-family homes on the market and 42 single family homes. If you’re looking for an investment, would you rather have 3 to choose from or 42?
Management of single family homes is easier because you only have one tenant and they often stay longer than multi-family tenants. Utilities and yard maintenance are two more reasons to consider single family. Tenants are often responsible for both at their home.
Easy To Sell
Another great reason to invest in single family homes is the large pool of buyers when you’re ready to sell. You could sell the home to another investor or a homeowner. You may even be able to sell it to your tenant! There are always people looking for homes.
Great Wealth Builders
Let’s use an example to look at how you could build wealth with real estate.
- You buy one $100,000 house per year for 10 years.
- You obtain a 15 year mortgage on each house and take the full 15 years to pay off each house.
- Each house can be rented for $1,000/month
- At the end of the 10 years you own $1,000,000 worth of real estate.
- At the beginning of year 16 you pay off your first house and one house per year after that.
- Beginning with year 16 you increase your annual income by $12,000 each year.
- If the homes appreciate a modest 3% annually each house is worth a little over $150,000 when you pay it off.
- By the time all homes are paid for you own over $1,500,000 in real estate and have monthly income of $10,000/month.
Yes this is a theoretical example and yes it is a long term investment, but it’s doable. This isn’t rocket science. It takes long term commitment, hard work and discipline but if you are committed to wealth building I know of no better way.
This has been a fun post to write. It has reminded me of all the reasons that I think real estate is a great investment. I know the difference this can make in your life. I hope I have given you great reasons to invest in single family homes. Please use the comments section to share your real estate investing stories and ideas.