One of the benefits of investing in Dallas-Fort Worth rental properties is that there’s a lot of opportunity for diversity. Investors can find single-family homes in established neighborhoods as well as multi-family properties that are duplexes and units in apartment buildings.
If you’re wondering which type of property you should buy, it’s important that you consider the pros and cons of each, and decide how these property classes fit into your overall investment goals and strategy.
Consider Your Investment Goals When Buying Rental Property
Before you buy anything, it’s important to establish and commit to a set of investment goals that will drive your decisions and actions. If cash flow is your main objective, you’ll probably do better with a multi-family investment property that already has tenants in place who are reliable, have strong lease agreements, and are likely to stay in place for the long term. This will allow you to maximize your rental income every month.
However, if appreciation is really what you’re after and you’re looking for a property that you plan to hold onto for 10 or 20 years, consider a single-family home. If you own a well-maintained property and keep up with the updates and upgrades that reflect market demand, you’ll have high occupancy levels and you’ll watch the value of your investment increase over time.
A Dallas-Fort Worth property management company can help you review your options and talk about how they fit into your investment portfolio.
Vacancy Costs Can Drive Decisions
You’ll also have to consider your tolerance for risk. Vacancies are expensive for property owners, and turnover costs are high. Multi-family properties can help you manage that risk better than a single-family home. When you invest in one single residence, all of your income relies on the tenants in that one property. But when you have a duplex or an apartment building, you have several income streams. If one tenant moves out, you’re still earning something.
There is a benefit to tenant retention when it comes to single-family homes, however. Tenants in single-family homes tend to stay in place for longer. So, you’ll have to balance the risk of vacancy against your desire for long term tenants.
Dallas-Fort Worth Property Management and Your Tenant Pool
Many property managers know that the most qualified long-term tenants are looking for single-family homes. These tenants want a home that has a yard, a garage, and is in a good school district. They’re usually willing to pay higher rent for a great neighborhood and additional things like a community swimming pool or an easy commute to work. This is a good reason to buy a single-family home; you’ll always have high quality tenants interested in your property, especially if its location and condition are enviable. You can charge the most rent and be as selective as you want with your rental criteria.
There are good reasons to invest in a single-family home and there are also good reasons to buy a multi-family property. Get some help from a qualified Dallas-Fort Worth property management company. We have some ideas for how to strengthen and diversify your investment portfolio, so contact our team at Assign Property Management.