Property investment is a lucrative business around the world. However, it is difficult for new property investors to decide about a suitable property. Different properties are available for sale, but you have to buy one according to your needs, which fits your budget and easy to manage for you. everyone has different skills and routine, so you just can’t decide on the basis of other’s experience and opinion. Here we are discussing different types of properties and their pros and cons. It will help you to make a better decision.
Pros and cons of buying Condos
Condos are very popular among property investors. However, buying a condo is not suitable for every investor. These pros and cons will help you to understand if it suits your need or not.
- The price of a condo is usually less than other types of properties. So, they can be an ideal choice if you want to start a real estate business.
- A condo is easy to maintain, as owners are not responsible for maintaining the exterior. Roof repairing, lawn cleaning and tree cutting are not problems for condo owners.
- Usually, condos are located near city centers and downtown's, so renting them out is easy. It ensures regular monthly income, and there are fewer chances to keep it vacant.
- Many tenants prefer condos as many amenities are associated with them. For instance, condo residents can access shared swimming pools, gyms and libraries.
- Security is another big plus of buying a condo. The building has a security guard and front desk person to check everyone entering the building.
- Privacy can be a concern for condo residents. Single-family apartments offer more privacy to families as compared to condos. Condo units are connected, and you can hear the voices of your neighbors.
- Residents have to pay the fee for maintaining outdoor amenities and the exterior of units and buildings. For some buildings, the fee can be high and a burden on the budget.
- Some buildings have strict policies, which can bother residents. For instance, a no-pet policy is not acceptable for many tenants.
Pros and cons of buying a single-family property
Single-family units are also very attractive for investors. But they have their pros and cons, which we are discussing here.
- When we talk about rental properties, single-family homes are the most popular. A single residential unit with no shared amenities is termed a single-family home. So, complete privacy is the biggest advantage of this kind of property.
- A single-family unit can vary from very small to very large. So, investors can buy according to their budget.
- Single-family units are associated with high occupancy rates. So, you will have a regular monthly income.
- Single-family units are available in all parts of the city. So, you can easily find them within your budget.
- Usually, a single resident lives in the same house for years. It saves to fro finding a new tenant every year.
- Tenants pay for the utilities they use, and there is no extra burden on you for the maintenance. Additionally, you can ask them to take the responsibility of repair in case of any damage.
- Single-family houses retain their value even after years. You can resale them at a better price whenever you buy another property. If the house is located in a good area and you have maintained it well, you can profit.
- If you fail to retain a tenant for years, the turnover can cost you. The turnover price is higher for single-family units than condos and multifamily units.
- You will depend on one tenant only for your monthly income. If they leave, you will have no income until you find another tenant. So, it holds a lot of risks.
- The cost of homeowner association fees can be a concern for property owners. Homeowners have to pay these charges every month, and the amount may vary according to the unit's location.
Pros and cons of Multifamily homes
Many property investors invest in multifamily homes, but they are not for everyone. These pros and cons can help you to understand if you should buy them or not.
- You can have multiple tenants on the same property. It ensures more cash flow. Every tenant pays rent, maintenance charges and other utilities, so you get a handsome amount of money every month.
- You are not dependent on a single-tenant, so less risk is involved. If a tenant leaves, you have others as your income source.
- Multifamily units save you from headaches of insurance and loans. Instead of dealing with multiple papers, you have to do all the struggle just once, and you can keep multiple tenants there.
- Compared to condos and single-family units, multifamily units are hard to find. They are not commonly available in all parts of the city.
- As compared to other residential properties, multifamily houses are very expensive.
- Regulatory standards for these units are higher as compared to single-family houses.
- Managing a large property can be more time-consuming than a small unit.
- Sometimes you must hire a property manager to deal with the problems of multiple tenants, and it can be an addition to the list of costs.
These are the few pros and cons of some common property investment options. Every property type has different pros and cons, and you can choose one according to your budget. However, get complete information before making any investment choice. Local property deals can also help you to find a suitable one. Many choices are available online too. Do a proper investigation before you make any choice. Visit different houses and discuss the pros and cons with experts. This is more important if you are investing for the first time. A good choice can be your first step towards building a property business, so carefully make the decision.