With regard to ROI - in terms of your time and money - have you had more succes with low cost rental units, average single family homes, or high rent properties?
I get my best cashflow from the low end units. Plus they're cheaper to pick up in the first place, and I get more for my money.
Little more headache, but worth it.
You are always better off with something like five 70k units instead of one 350k unit. You just cant cash flow on higher end properties. They sit vacant for longer periods of time and carrying costs will eat you alive.
One vacancy out of five wont hurt you and low end units have a large rental pool to draw from. After all, lower income folks need to rent cause they cant afford to buy. Folks who ultimately rent a higher end property wont be there long cause they can afford to buy. More often than not, they are part of a company relocation and will buy as soon as their lease is up and have gotten to know the area.
Renters are renters. Since they generally cant afford to buy and may never be able to, they may stay put for years.
Yes higher end properties appreciate faster. But if you do the math on that 350k property that went to 500k in several years, you'll find you actually lost money.
In general single family homes average middle class and below produce the best ROI.
It is all subject to location, is the rental market conditions is growing stronger or weaker. Are rentals staying on the market longer before renting than they were a few months ago, or is the time on market shrinking?
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I've found you get the most cashflow with low end units. In my area, high end units do not cashflow but the of course appreciate better.
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:oops:
I get my best cashflow from the low end units. Plus they're cheaper to pick up in the first place, and I get more for my money.
Little more headache, but worth it.
Do higher priced homes generaly appreciate faster then low cost units?
How would you predict the value of a $350,000 home to compare with the value of five $70,000 homes after holding each for 5 years?
Low to Low-Mid investments definitely get better cash flow and usually works the best for me!
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low end units should always provide a better yield...there is more risk...
But your also right on appreciation. The low end units generally do not appreciate nearly as well as the more middle to slightly high units.
You are always better off with something like five 70k units instead of one 350k unit. You just cant cash flow on higher end properties. They sit vacant for longer periods of time and carrying costs will eat you alive.
One vacancy out of five wont hurt you and low end units have a large rental pool to draw from. After all, lower income folks need to rent cause they cant afford to buy. Folks who ultimately rent a higher end property wont be there long cause they can afford to buy. More often than not, they are part of a company relocation and will buy as soon as their lease is up and have gotten to know the area.
Renters are renters. Since they generally cant afford to buy and may never be able to, they may stay put for years.
Yes higher end properties appreciate faster. But if you do the math on that 350k property that went to 500k in several years, you'll find you actually lost money.
In general single family homes average middle class and below produce the best ROI.
It is all subject to location, is the rental market conditions is growing stronger or weaker. Are rentals staying on the market longer before renting than they were a few months ago, or is the time on market shrinking?
[addsig]