If you’re considering getting into the landlord game, you might wonder whether it’s best to buy a single family home or a condominium. Many people believe it best to stay away from condominiums because of all the issues with homeowners associations, and they have a point. However, single family homes have many issues, too, so don’t make up your mind so quickly. Consider these things:
Investment returns When you’re buying an investment property, the first thing you should do is pencil out your real estate deal to see if it has fair cash-on-cash investment returns. As a general rule, you’ll find that single family homes typically have lower cash-on-cash returns than condominium properties. So a fair deal on a single family home might be a cash-on-cash return of 3 to 5 percent, while a condominium might have 4 to 7% returns. The condominium will probably take this round, but every property is different, so you need to pencil out your specific deal to understand the returns.
Tenant turnover Every time your tenants leave, you’ll need to re-rent the property. And it’s a lot of work! You have to advertise, take calls and emails, show the property, draft a lease, do a credit check, move the old tenant out,... Read More