Investing in properties as a landlord requires background knowledge on the types of properties, the details that make them a good investment, and if people are willing to rent it. It is best to know both the good and the bad to help you make a decision.

Do you want a property where you can cater to a handful of tenants in just a single location? Or do you want several properties scattered around? Or maybe you want both? Let me break it down for you so you’ll know what options suits you best.

Single-Family Rental Properties

You might want to consider purchasing this kind of property. It has become popular over the years because some people would like to live in an actual house instead of in a building that is shared by a bunch of people.

Advantages

• The property value increases

It is good to invest in a property now because its value will possibly grow. Of course, this will depend on the location but if you choose a good area, then it will not depreciate.

• Profit

The rent for single-family rental properties is, understandably, higher. The tenants are paying for the extra space and the perks of having their own house to themselves. This means more income for you too.

• Long-Term Tenants

The tenants that rent this kind of property tend to stay longer. They are usually families that have children and want to have a house they can grow up in and can be near their schools.

• Can be sold easily

These houses are usually easy to sell. That is, if you decide to sell someday. There will always be families looking for a home.

Drawbacks

The downside of owning this property is that your investment is in a single place. You should also keep in mind that once the tenants leave, the property will be fully vacant, so it will stop generating income for however long it will take to find new tenants.

There is also a chance that the property will decrease in value. As I said, it will depend on your location. For example, the location of your property did not develop over time and there aren’t a lot of establishments near it. Another factor is if the property was poorly maintained.

Multi-Family Rental Properties

Multi-family rental properties are usually apartment buildings that can be rented out to several tenants. They are quite common for the single and working people since they don’t need the extra space (we’ll elaborate on this later).

Advantages

• Substantial income

Owning this kind of property can also generate a fairly good amount of profit. You will have many tenants paying rent at the same time. So in case one tenant fails to pay rent, you can still earn from the rent of other tenants.

• Less expenses

If you invest in a multi-unit building, this would mean that it will cost less for you to maintain the grounds and the common areas.

• Easy management

With your tenants all in one place, it will be easier to manage. You do not have to go from one location to another to check up on your properties and tenants. You can just focus on that.

Drawbacks

• Short-Term Tenants

As mentioned earlier, the tenants are usually those who are single and have just started working. It means that this is probably just a temporary set up for them and they will eventually move to a bigger place once they can afford it.

• Competition

There has been an increase in competition for tenants lately. More people opt to rent rather than buy their properties. This is why property owners and landlords have to offer more incentives to retain or gain more tenants.

• Expensive

Obtaining an apartment building will cost you more because there have not been a lot of new buildings built. Since the demand is high, the price will also be most likely high.

Each type of property has its pros and cons. What’s important is you choose the one that will suit you and your goals. Advertise it using Padleads. Creating your property listing will be easy and you can syndicate it to other rental websites to expand your audience.