A single-family home is a great, sustainable investment type. But what about smaller multi-family investments like duplexes and triplexes? On today’s Q&A Monday, we’re diving into that question—and more.
On this episode of Investing in Real Estate, I’m answering three listener questions including how to focus on an investment type, how to set aside funds for your repairs, and what is the most important piece of buying criteria for an investor. Don’t miss episode 653!
On this episode you’ll learn:
- What investment type is best long-term.
- How to set aside funds for repairs.
- What you need to know about buying criteria.
- And more!
What Investment Type Is Best Long-Term
I’m a serious champion for single-family housing investing. I find that in a single-family home, your tenants are likely to stick around longer. Fewer tenant turnovers mean higher ROI in your pocket! However, smaller multi-family units like duplexes and triplexes can also be great investments. In fact, I would encourage you to consider any investment type that is less than four units. More than four units qualifies as a commercial property.
How to Set Aside Funds for Repairs
It is typical to have a small reserve fund with your property management team. This can range anywhere from $500-$1000. I suggest doing this so that your property manager doesn’t have to call you over every trivial repair that arises. After that, you should always account for repairs in your ROI formula. As long as you’ve done the math correctly, you shouldn’t have to worry too much about funding your repairs.
What You Need to Know About Buying Criteria
As a new investor, it can be easy to get swept up in the details. While you do want to consider things like crime data and job diversity in a market, when it comes to the actual investment: keep it simple! If the numbers make sense, it’s likely a great investment
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DISCLAIMER: I am not a financial adviser. I only express my opinion based on my experience. Your experience may be different. These videos are for educational and inspirational purposes only. Investing of any kind involves risk. While it is possible to minimize risk, your investments are solely your responsibility. It is imperative that you conduct your own research. There is no guarantee of gains or losses on investments.
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