The investment game can be a cruel one yet a highly beneficial one. You, as a potential investor, have to take a number of things into account. You must make sure that not only is it the right time to invest for you personally but also that it’s the right time to invest for you in the market. Single family homes are often seen as a safer investment but for a lower reward; on the other end of the spectrum we have multi-unit apartments. They carry a slightly bigger risk and of course, garnish much bigger sources of income. It all boils down to what is the best option for you as a potential investor.
Multi-Unit Apartment Investment
Many of the advantages of multi-unit investment have to do with the growth potential. The possibility for growth is attributed to the fact that your appraisals and future value are based on net operating income. This means rent can be increased on all your units at once if you upgrade the appliances, or make some other universal improvement to the property. Investing in multi-unit apartments also opens the door for outsourcing your maintenance; it certainly doesn’t make much fiscal sense to hire a property manager for your single-family home, right? But with an on-site maintenance crew, though you’re expending more capital, you’re freeing up a significant chunk of your time. With enough units, you could even qualify for a non-recourse loan, which means you would not be required to sign the loan as a property owner! However, since more money is necessary up front, and you may need to borrow, there is more risk involved, interest rates can be higher, and loan terms can be shorter.
What About Single Family Homes?
Conversely, it doesn’t take as much money to purchase a single-family home, especially a fixer-upper that you’re planning on renting to either one family, or subdividing and renting as apartments. There are even programs that allow for very low down payments for first-time homeowners, and even better ones if you buy and live in the property for a year and a day. The turnover rate also tends to be lower in single-family homes, and they are more effective as permanent options than apartment buildings. However, it can be difficult to manage several properties spread out over various locations, especially if you’re planning to do the maintenance work yourself.
Trust the Professionals at Clagett Enterprises for Your Real Estate Needs
If you’re looking for the perfect realtor for your property or to assist during your purchase of any home or apartment unit, you can rely on Clagett Enterprises. Clagett Enterprises is a full-service real estate company with almost 30 years of experience in the Frederick and Western Maryland area. For assistant selling your home and getting the best possible price, contact us online or give us a call at 301-665-6009. To meet our team and see some of our beautiful homes, follow us on Facebook, Twitter, Pinterest, and Google+.