Single family investment properties
In March, I posted a story about duplexes suddenly becoming a viable, cash flowing, option for prospective investment real estate buyers. Four months later, I’m here to highlight the topic again. But this time, I’m not talking about two families. They are still an increasingly attractive buy, but the real surprise in the past few months has been how lucrative buying up single families has suddenly become in the St. Louis investment real estate market.
Many investors have always found these particular properties attractive. And while they can be good money makers, I have always been a bit reluctant to push clients into them. The resale value is typically better than a multifamily, but that comes at a cost. The cost of a safety net. Rather than putting money in your pocket each month, these properties traditionally have required out of pocket expenditures each month to cover the mortgage and expenses. You might might a good return at the sale, but keeping up on those payments can be a real drag on the bank account.
But now things are changing. Thanks to all the foreclosures on the market, single families in many areas are becoming cash flowing properties. The profits made each month can’t typically touch a good multifamily, but as in the past, the real money will be at the resale. You can now afford to buy, do some fix up, rent and hold indefinitely. Rather than selling at the wrong time because the mortgage and expenses are burning a hole in your pocket, you can hold until the time is right. And in real estate, timing is everything.
So the next time you dismiss purchasing a single family at first glance, step back and consider what you do. You just might be passing up some of the best returns on the market.