Buying a Rental Property? How to Choose Between Single-family and Multi-family Homes
Entering into the Northern Virginia real estate market certainly requires time and monetary commitment. Depending on the purpose for purchasing a rental property the Fairfax County area for example determines whether one should invest in a single family or multi-family dwelling. In either case, one should prepare short or long term goals, be cognizant of his or her financial health and monetary comfort zone, and conduct a comparative market analysis before considering a real estate investment.
Short Term Versus Long Term Investments For investment purposes, a multi-family dwelling, especially in say the Arlington and Alexandria areas provides the owner with more potential rental income than a single family dwelling. However, if the purpose is to claim the new location as a future home, then investing in a single family dwelling provides the buyer with time for relocating. One should be aware, however, that rentals are not eligible for homestead exemptions. With the exception of Delaware, Pennsylvania, New Jersey, and Rhode Island, all states offer some type of homestead exemption for primary residences. As a result, if changing one’s residence is part of the long-term goal, then considering the purchase of a single family for a temporary rental, until you are ready to change homes, may prove advantageous. Investment Considerations You must be prepared for the initial rental preparation. Plumbing and sewage lines must be in working condition and adequate electrical service and outlets, in combination with internet access are critical. If you depend on registered, licensed, and insured contractors to provide the necessary workmanship, you may have to prepare yourself for delays in the delivery of goods, inspections, and completed work orders. As a potential landlord, you also have to ensure that your finances are not be stretched beyond your monetary comfort zone.
Location Versus Location
Any real estate investor must consider location. One should look at the demographics of an area, the percentage of violent versus non-violent crimes committed in an area, and the future plans for development of any surrounding areas. Usually the rating of the local high school will also provide insight into the stability of the surrounding communities.
Consult a Reputable Broker
Before making an investment, it is important to consult with a licensed and experienced real-estate broker familiar with significant experience with area rentals. Your broker should be willing to provide information and guidance regarding long term versus short term available rentals in the Northern Virginia area.
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