There are an abundance of reasons to invest in a single-family rental property versus alternative real estate investments, especially considering single-family rentals are one of the fastest growing asset classes- and for a good reason. Here are the top 7 benefits to having a single-family rental property in your portfolio.
7 Benefits of Owning a Single-Family Rental Property
Did you know a single-family rental property can help hedge your real estate portfolio against inflation? Continue reading to learn all the glorious benefits that single-family rental properties have to offer.
While many investors may turn a blind eye to single-family rental properties due to the maintenance and upkeep they require, the tradeoff is that these properties offer reliable, predictable income and the ability to adjust rent over time. The ability to collect reliable income and adjust rent serves to make these properties a great inflationary hedge.
Property Value Appreciation
Over the long-term, home prices have always increased throughout the U.S. Acquiring a single-family rental property gives you the benefit of property value appreciation, another inflationary hedge. If you hold your investment, you can sell it for a larger profit at a later time due to its appreciated value. No matter what kind of market we’re in, property appreciation will always be in your benefit to take advantage of.
The tax benefits associated with owning a single-family rental property are often taken advantage of by investors to help build their wealth. Aside from traditional tax benefits associated with deducting depreciation, investing into a single-family property allows you to deduct property management fees, leasing fees, and travel expenses. As your rental portfolio grows, your tax benefits should follow alongside.
Easy to Sell
The demand for single family rental properties is always there, making it fairly easy for an investor to offload a property. There are more ways to sell a single-family home, given the property can be presented as an investment property or a residential home, maximizing your investment’s flexibility. Many single-family properties are cheaper to acquire and maintain than multifamily properties, giving you a faster sale when it comes time to sell.
Less Hassle and Management
Single family rental properties do not require the same intensive strategies as multifamily or other types of investment properties. Since you will only be managing one tenant, there is less hassle and management overhead to encounter when acquiring a single-family rental property. Additionally, you won’t have to worry about maintenance issues if you require the homeowner to be responsible for most repairs.
Owning a single-family rental property gives you more control over who you chose to rent to, after all, you can insist upon a thorough screening process to find the perfect tenant. Once your tenant commits to renting, you will have reliable income so long as they are on a long-term lease. Having reliable tenants can save you costs in tenant turnover as well as marketing and advertising fees.
Diversification means spreading your assets around with different strategies to reduce one’s risk and gain value in the market. Acquiring a single-family rental property is an attractive way to diversify one’s real estate portfolio. With any type of real estate property, you also have the ability to focus on many different markets versus an single market, lessening the overall risk in your portfolio.
RCN Capital offers short-term and long-term financing options for real estate investors. Whether you are looking to fix & flip properties or hold properties for rental income, RCN has flexible options that are suited to your needs. Connect with us today to discuss your next real estate investment.