When Specialized Fort Worth Property Management Company started out almost 30 years ago, the general public was mostly interested in investing in multi-family units or apartments. If people did invest in single-family homes, it was so they could fix up an older home and resell it for a higher value. Though this is a smart and quick strategy for making money, more and more investors are adopting a buy and hold strategy today. Just some of the reasons to invest in a single-family rental are: the investment stability, affordability, less tenant drama, an increase in demand, better available management, and a quick and easy exit strategy. Today, there are almost twice as many single family homes as there were 10 years ago during the housing crisis. In fact, according to the National Multifamily Housing Council, 43% of renters choose to reside in a single-family rental. Because of the increase in demand, property management techniques have changed. Learn the benefits of investing in single-family homes and how Specialized Fort Worth Property Management Company can help you maximize your profits.
“We’re becoming a nation of renters — and not just apartment dwellers. Since the housing crisis, more renters are writing the monthly check for single-family homes. More of them are also writing checks to corporate landlords like Invitation Homes, Colony-Starwood, and American Homes 4 Rent. Back in 2005, ‘there were about 10.5 million single-family rental properties,’said Karan Kaul of the Urban Institute. ‘Today that number is north of 17 million. That’s almost a 70 percent increase. If you look at the other segments of the rental market,’ he said, ‘the growth in those units has not been close to what you’re seeing in the single-family market.’”- Marketplace
People that want to live in a single-family rental are usually doing so because they like the stability and home life that a house provides but they also want the flexibility and mobility of renting. This means, as a property owner, that you’ll be able to rely on your good tenants who will take care of your property and most likely stay long term. With a long term tenant who pays their rent on time, you won’t need to worry about frequent turnover and vacancy costs that often play a big part in multi-family units, or apartments. You’ll also be able to form positive relationships with your tenants over time, decreasing the amount of tension around maintenance issues and neighbors.
“From day one, you want to work on developing a positive yet professional relationship with your tenants. That means making them feel welcome and comfortable at the property, and providing them with all the information they need to start their tenancy off right. That includes contact numbers, details on your expectations, important dates and locations of the nearest grocery stores, schools, bus stops, etc. And, make sure they know where to locate emergency shut off valves for water and gas in case they need them.”- Zillow
Because single-family rentals usually increase in value over time, you’ll be earning passive income and can expect a very good return on investment. If you take a look at past real estate patterns, single family homes tend to appreciate much faster than multi family units. Since the value of single family homes is decided by supply and demand, and demand for places to rent is usually high, they appreciate quickly. On the other hand, multi family units are valued based on the rent being charged and the state of the home, meaning that value only goes up if all the rent prices increase in that certain location.
In general, single-family rentals cost less than multi-family homes, such as duplexes and triplexes. The down payment required for a multi-family rental could be anywhere from 25-30%, while single-family home investors usually only have to pay around 10-15% down. Insurance rates are also cheaper for single-family rentals. In addition, there are many available options currently in the single family rental market, making it a buyer’s market. This means you’re more likely to find a better deal when investing in single-family rentals than anywhere else. Though paying for your property in cash would be ideal, it’s not always realistic. If your situation requires financing, single family homes often offer less expensive financing options that multi family homes do. You are more likely to be offered lower interest rates, longer terms, and higher loan-to-ratio values with single-family rental properties.
No Tenant Drama
One of the worst parts about owning a multi-family rental is the tenant-to-tenant complications. Noise complaints, parking troubles, and plain old drama can make you feel like you’re parenting teenagers on a daily basis. Tenant drama like a divorce or a lost job can still happen, but are less common and usually more serious than complications in multi-family rentals. Though a property manager can help handle all of those things, it’s much better to invest in a single-family rental where those problems don’t exist. When there’s only one family in a home, there’s more privacy for them and less headache for you or your Fort Worth property management company.
As we mentioned earlier, people that are looking for a single-family rental enjoy the fact that they can live in a home with a yard and enjoy a great neighborhood with respectable schools. The growing number of millennials are looking to start families without having to buy a home. Wanting to keep their options open for spur of the moment travel plans or career changes, millennials appreciate the renting life. With a plan to stay long term, single-family tenants are more likely to take good care of the home and lawn while informing you of any maintenance problems in a timely manner. Because single-family homes are larger, contain land, and are located in higher-value areas, you have the potential as a property owner to charge more rent. Tenants are usually willing to pay more to be able to also enjoy the fact that they can leave easily, if need be, and aren’t 100% responsible for the property. Our Fort Worth property management company is still involved in single-family homes in regard to repairs, maintenance, rent collection, marketing, and much more. It’s up to you as the property owner, and the local housing laws, to decide how many expenses you would like to take on and what the tenant is responsible for. With the demand for single family rentals on the rise, they are the smart investment choice for property owners.
Specialized Fort Worth Property Management Company has processes and services in place that make owning a single family rental investment easier than ever. Rather than trust a property management company that uses multi-family business models to manage apartments as well as single-family homes, choose a property management team that has specialized in single-family rentals for nearly 30 years. Our technology-driven systems have proven the test of time and are still rated #1 in comparison to other property management companies. Specialized Fort Worth Property Management Company’s nationwide portfolio consists of over 70% single-family homes.
Simple Exit Strategy
When you invest in a single family rental, the goal is to buy and hold the home, collecting the mortgage through rent. Once the house is paid off, you should sell the house and take home the profits from the increase in value. Fortunately, with the high demand for single family homes, you shouldn’t have a hard time with renting it out or selling it in the end. You can then use this money to invest in more properties or put it towards your retirement fund. If you’ve owned the property for a year or more, you may qualify for lower capital gains taxes when you sell. You’ll also be able to take advantage of tax breaks if the property depreciated in value. Investors also get an annual deduction that assesses the value of the home and how many valuable years it has left. To ensure that you make the most out of your single family rental investment, let Specialized Fort Worth Property Management Company help you along the way.
“SPM’s reporting and accountability is excellent. I have been impressed with the courteous, professional and efficient manner in which the affairs of my properties have been conducted. I recommend Specialized as an agent for handling rental properties.”- William M., Owner
Our team of experts will handle the everyday stresses of being a property owner and protect you against any mistakes made from not being aware of legal and local regulations. Our services include marketing, property showings, tenant screening, collecting rent, maintaining your property, providing you with detailed monthly reports and year-end tax statements, and much more. You can trust us fully to make your rental property the best it can be and help you increase your profits. Take advantage of our user-friendly online owner user portal, where you’ll have constant access to your rental property from any location. Contact us today to find out how Specialized Fort Worth Property Management Company can multiply and take care of your investment in today’s growing real estate market.