Are single family homes a profitable investment strategy?

Asked by Trulia Houston, Houston, TX Mon Feb 4, 2013

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Al Geffon, Agent, Houston, TX
Tue Feb 5, 2013
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It depends on the objective. If you're looking for a place to "park" your excess funds, it could be a worthwhile component of an overall strategy. But for the individual looking to begin accumulating capital, there are other means that will produce a more desirable result.

While nice homes in desirable areas rent quickly (I have two that never stay vacant more than a few days), as an overall investment strategy such properties rarely yield a decent ROI if purchased today. This is largely a residual effect of the market collapse a few years back. Lenders now require a minimum of 20% down and a six-month cash reserve for each additional property owned, including one's own residence. Tax write-offs notwithstanding, it can take years to break even.

I personally investigated the possibility of purchasing additional rental homes, but decided against it. For my situation, I think I made the right call.
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1 vote
Pauline Mora…, Agent, Wetherfield, CT
Wed Feb 6, 2013
I think single family houses are an integral part of investing. It is an ideal way to broaden and diversifying your investment portfolio. It is sometimes easier to rent, lease and sublet or buy and flip. There have been many estates, foreclosures and abandoned properties on the market because of the economy. The glut has impacted the wallets of investors. They are combining efforts to make the market adapt to the demand created by the economy. The goal is to improve them for long term or short term goals. It is better to rent than to buy when there is no steady income. A single family home is sometimes considerably less than a multifamily and sometimes in better condition sometimes needing only cosmetic work to be done to the property. That is the conception of the investor today so some are teaming up with associates, friends and family for future gain. The idea in their thinking is that, not everyone can buy, some will have to rent. . This thinking is very beneficial for those who are eager to move quickly to renovate and expand existing structures. It does not take an expert to utilize this strategy. It just needs commitment organization and resources.
1 vote
Travis Nevill, , Houston, TX
Wed Feb 6, 2013
I think single family homes can be a profitable investment strategy. The important thing is to do your research and know the area you are investing in. Having a good team behind you will help a lot. Finding a contractor and agent that you trust will be beneficial. I work at a real estate investment firm in Houston and see people everyday that are making money from their investments. It is important to note that not every investment is going to work out unless you are either very conservative or you are lucky.
1 vote
Mike Matthews, Other Pro, Houston, TX
Tue Feb 26, 2013
I have done quite well with sticks and bricks single family homes. You make your money when you buy not when you sell.

What is your investment strategy? Do you wish to rehab to retail, Wholesale, Owner Finance( My favorite choice)

What %of retail value are you willing to pay? I would not pay more than of 70% of a very tight CMA report. I would choose my investment home plus or minus 2 years of age, plus or minus 200 sq ft and in the same Key map page and number for only the last 6 months. If you can not get four good comps, then you can expand your distance for a search.

Come on out to the RICH club ( Real Estate Investment Club of Houston) and learn more about the game. There are dozens of ways to buy.

I will introduce you around and help you find your niche.
0 votes
Rob Ertman, Agent, Denver, CO
Wed Feb 6, 2013
Yes but be aware of the downside; it can be very costly to make major repairs such as yards,carpet, paint and covering the mortgage when not rented.
0 votes
That is very true, but if he remains in control and does not let the tenants control him, he will come out ahead.
Flag Tue Feb 26, 2013
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