Investing in Single Family Homes vs. Plexes

As a commercial real estate investor, how can purchasing duplexes, triplexes or quads benefit you? For starters, newcomers can reside in one of the homes, while still earning cash flow from the other units leased. While most investors tend to shy away from living too close to tenants, setting boundaries can streamline how operations are managed. For instance, hiring an on-call repairman and delegating his or her number to renters is one way of deterring the trap of waking up at forbidden hours for maintenance.

Otherwise, all the units can be rented out to multiple families, for multiple income streams.

In choosing the type of commercial property to invest in, it all boils down to what can be afforded at the time of purchase. The bigger divisions of property however, the bigger the returns on investment will be.

How do plexes differ from single family homes in terms of investing? Well, a single family home is easier to buy, because chances are it’ll cost less. By exerting a little more effort into capital investments however, the rewards should be larger with collective payments each month. In addition, when someone buys and holds an investment property, payments can be made to the lender; savings can be maximized year after year; and the capital of multiplex real estate can be reserved for more profitable sales in the future.

History has proven that land and real estate appreciates over time, despite what critics claim. There are instances where neighboring properties and other factors will affect the value of the property but by choosing the right environment, real estate properties are sound investments whether single family homes or multiplexes.

Real estate ultimately secures a steady income and serves as a way of building wealth, even if you don’t have hundreds of thousands to begin with.

New investors should focus on:

Getting Credit Reports in Order: In order to earn startup approvals and mortgages, the better the credit, the better the rate of interest. Jason Hartman also discusses using as little personal capital as possible. The revenue from tenant payments when priced right, should provide sufficient income to repay loans on-time and reserve extra to build money wealth.

Saving for Down Payments: This serves as the initial investment, which can be regained after renting the duplex, triplex or quad following a few years, or even months at times.

Analyzing the Market: Ensure that you delve into the 10 Commandments Of Successful Investing with Jason Hartman, to avoid common pitfalls that new investors make.

Once these orders of business are set, the stepping stones to wealth will be firmly rooted on the ground for successful real estate investing. (Top image: Flickr | tonyhall)

The Commercial Investing Center Team