The Advantages of Buying Single-Family Homes
March 19, 2007 by David Cowgill
Nearly 80% of all real estate transactions take place in the lower — middle range of house prices. Specifically the average home in this range is a three-bedroom two bathroom house with a carport or garage and approximately 1100 ft.². Why are these bread and butter houses such hot sellers? Because they are the transition houses for people moving up and down the financial ladder of life. They are usually the starter homes for up-and-coming couples and May are the lifelong homes for the blue-collar backbone of America.
This area of real estate investing has several advantages. First these units represent the bottom end of the housing market. The sale prices are low the down payments are usually low, and the demand is high. These homes can be diamonds in the rough. By putting in some minimal fix up and cleaning, you can resell them at a fantastic profit.
An example would be somebody like John who buys single-family homes around $200,000 and renovates them. After he fixes up the homes he rents them out at an excess of $1850 per month. If you run the numbers, these homes are cash flow positive and slowly paying down John’s monthly mortgage. Now John can either hold onto the single-family homes and benefit from the rental income stream or you can try flipping a single-family homes to other investors and make a profit.
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Funny thing, in my part of Utah right now you can actually rent a single family home for more than you can rent a similarily priced duplex. With single family homes ou only have to worry about one tennant, and you have lots of other options like lease to own.
Lower priced single family homes are great for investments! Its just like you said, that the fact that they are low priced and high reward.
Walt