With different types of income properties on the market, it can be difficult to choose one that provides a great return home extensions melbourne on investment without biting off more than you can chew. Below is a description of the types of investment properties, and what managing them is really like.
Single Family Homes
Investment properties essentially come in two types. Single family dwellings and multi-family dwellings. It is very important, when deciding to buy an investment property, not to purchase one that requires more maintenance then you can manage.
Single family dwellings are usually the easiest to rent out and resell. Tenants are usually looking for a long term lease. This means less turnover, and more consistent income. They are also usually the easiest to flip, if they are in poor condition. Single family homes are excellent beginning investment properties.
On the other hand, single family units come with lower income potential. One tenant means one rent check each month, and unless you purchased the home with cash, a portion of that check will be spent on the mortgage.
Renting out a single family home also means that if your tenant moves out and leaves you a big mess, you will not have any other income to rely on until you get it cleaned up and can rent it out again.
Multi-family dwellings can be duplexes, triplexes, fourplexes, or apartment complexes.
Duplexes, Triplexes, and Fourplexes
These types of units can be a wonderful investment, with many of the benefits of single family homes. If you choose to live in one of the units, you further increase the benefits by ensuring you are on site in case of emergencies, or to collect rent. Tenants renting from a landlord living next door also tend to be better behaved, and take better care of the unit.
Living on site lowers rental income. While people looking to rent one of these units are often looking for long term living spaces, they may not be as stable and responsible as those looking for a single family home. Consider these things before investing.
Apartments offer maximum income potential. Financial risk can be minimized with regulations such as background checks for applicants, pet restrictions, smoking restrictions, and semiannual inspections.
With the increased income of apartments comes increased maintenance. Tenants tend to stay for shorter periods than renters in other types of properties, and dealing with complaints from five or more families can be daunting.
Consider your options carefully. Operating an investment property can be a wonderful experience if you purchase one you can manage.