One of the first questions folks ask me after they find out I’ve become a full-time real estate investor is “What type of real estate is the best?” While the answer will always be “It depends on what you want it to do for you,” below is a case as to why SFRs (Single Family Residences) could be THE way to go.
To start; SFRs are plentiful, low-cost (when investing nationwide), easily financed, well known, relatively liquid, tangible, stable, have steady long-term growth, produce monthly income, and are tax-advantaged.
One benefit rarely talked about is the creativity and flexibility SFRs offer.
For instance, in place of (or in combination with) a 529 Plan, what about purchasing an investment SFR in an appreciating market to pay for college? Have you ever considered using a 200k investment home with a 15-year mortgage for a 3-year-old child? Might that make sense if you’re a grandparent looking to help but don’t have 200k liquid to set aside?
What about retirement? Maybe supplement your current income and save for retirement at the same time? Or maybe buy one property a year and retire early in place of a non-matching 401k?
One of my favorite reasons for investing in real estate is to take advantage of inflation. Did you know 22% of the dollar bills in circulation were “printed” in 2020? Real estate can benefit from appreciation, increased rents over time, and leverage.
Purchasing investment SFRs has never been easier. Even during the pandemic, with Virtual Tours and DocuSign, buying a home 2,000 miles away is a relative breeze.
The key to this entire post, however, is finding and vetting a good property manager that will partner with you through the process. Over the years I’ve been able to develop these relationships in several markets and I’m happy to share!