First time investing in real estate? Here are some helpful distinctions.
Whether it’s a single-family home in the suburbs, a multi-unit property in the city, or an Airbnb up in the mountains, there are so many great options available to those who are serious about real estate investing.
What to know about owning a multi-unit property:
- Diversified portfolio. If you have, say, 20 units (700 square feet each), and half of the tenants decide to leave suddenly, that would thankfully still leave you with half of your building full of tenants who are still paying rent. In a single-family house, the loss of the tenant means the complete loss of income. Also, if all of the units in a multi-unit property are full, then it’s more profitable than a single-family.
What to know about owning a single-home family property:
- Easier to focus on. The idea here is that there’s an emphasis on quality, not quantity. You’re only dealing with one tenant, and hopefully, one with whom you’ll be able to develop a positive relationship throughout their long-term stay. It’s only one property (ideally in a nice neighborhood), so it’s naturally easier to maintain and less expensive. Unlike a multi-unit property, less complicated problems will rise simply because only one group of people is living there.
What to know about owning short-term rentals (Airbnb):
- Higher nightly rates. You can charge almost double per night what you would for a single-family home throughout the year. Location matters more, too; you can charge anywhere from $200 to $600 depending on how desirable your location is. For example, we have a rental up in Grand Lake that we charge anywhere from $300 to $450 per night. That’s great, but they’re not always occupied.
If you truly need that consistent payment coming in, this method can be a bit sketchy since it’s so dependent on seasons. The benefits are higher income, less wear and tear on the property, and easy maintenance.
Now, there are more complexities to each of these investment property opportunities, and I’d love the opportunity to go over those with you one-on-one. I’m here to answer your questions and offer professional advice, so don’t hesitate to reach out via phone or email anytime.