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Investing In Single Family Homes

Aug 17, 2007
Similar to other forms of investment, real estate also has its own share of ups and downs. But, of late, it has been receiving bad publicity. Many people consider investing in single family homes as a better option than apartments, shopping centers, office buildings or raw land. It is essential to know a little about investment in single family homes, before you jump into making an investment. It is important to know about the kind of problems that can arise in a particular area. For example, if you buy a house in an area which is flood prone, the tenants to whom you rent the house can sue you.

In case such a situation arises, you are likely to end up losing the house. Besides, you should also know about the property value in a locality. In case many houses are being built up in a particular area, it signifies that the property value of the house is likely to go up. So, it is important that you check on the demand of real estate properties in a particular area before making an investment in single family homes. In addition, you should also know about the kinds of homes that can be difficult to resell or rent out. More often than not, homes with two or less bedrooms are difficult to rent or resell.

Investing in single family homes offers a number of benefits over apartments or other types of buildings. Some of the advantages are as follows:

. Requires less money: It offers a common man with the opportunity to buy a home at a low cost. In most cases, you require to pay around 10% down payment. This implies that you can purchase a home worth $ 100,000 for a down payment of only $10,000. Single family houses are considered to be brilliant options for average real estate investors, as it is feasible for the average investor to save $10,000, while buying the property.

. Flexibility: Single family houses offer greater flexibility, as compared to apartments or shopping complexes. For example, let us assume that you could buy one apartment or five houses with the same amount of money. When you require money, you would have to sell the whole apartment, bring a partner or refinance the entire property. However, in case of houses, you might have to sell only one, arrange for a partner for one or refinance just for one. It implies that as compared to single family houses, apartments are difficult to get rid off.

. Higher Equity build up: More often than not, a single family home is likely to earn more appreciation as compared to other types of real estate like houses and apartments. The value of an apartment depends on the income it can generate. Whereas, the value of a single family home depends on comparable sales.

. Low chances of rent control: Rent control refers to a situation when the government informs you about the rent to be charged. In many big cities, buildings have been abandoned, as the owners were unable to charge sufficient rent to cover their basic costs. But, in the case of a single family home, the rent control laws do not apply to them, in most cities.
About the Author
Real Estate Investments are now easy with Realnet USA's step by step Real Estate Investing process. We help you find your Real Estate Investment, to view live inventory please visit http://www.realnetusa.com .
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