Townhomes for Rent
Real estate investing is an excellent way of growing wealth; however, you need a proper understanding of the industry, its related risks, and rewards. But, if you’re interested in smart opportunities, look at the investment potential of townhomes for rent. They may offer more benefits than investment in traditional apartments or single-family homes.
One of the notable advantages of townhomes over traditional apartments is higher rental income which is sought after a highly rated tenant profile and families with a solid income.
Investors usually wonder how to know if a rental property is a good investment; this blog will give you some insight.
Why is Renting Properties a Smart Investment Bet?
The rental market is unpredictable, and recently you can see a change in the demand for rental properties among families. This latest trend is due to several factors: the higher cost of homeownership, people seeking a lower-density environment, and work-from-home flexibility.
Residential rental properties may include single-family homes, multifamily residential buildings, townhomes, vacation rentals, or mixed-purpose properties. Real estate investing requires a commitment to doing proper research, understanding markets, and identifying good investment opportunities.
With the strong rental demand and a general shortage of housing rents for properties are on the rise. The Housing Vacancy Survey in the United States says there were more than 44 million renter households in the third quarter of 2021, and there is only an upward trend for the coming years.
According to the National Association of Realtors, the median rent for any two-bedroom apartment rose to $1,380 in 2017 from $1,100 in 2007. The outlook for real estate investing in residential real estate is strong.
If you are looking to invest in the residential rental market, definitely consider townhomes for rent. They offer numerous advantages to landlords and are an excellent option for tenants.
Why Invest in Townhomes for Rent?
A townhouse is a city dwelling, a multi-story property that shares one or two walls with neighboring properties. Each has its own door, and usually a front and a backyard. The lesser degree of adjoining neighbors, larger space, and multiple levels make them attractive to a variety of Tenant demographic.
Townhomes accounted for 11% of the new single-family construction in 2020, while the number of new construction townhomes climbed by more than 28% from 2020 to 2021.
The rent for a townhome depends on many factors some of which are:
3. Included Amenities
4. Number of Floors
5. Number of Parking Spaces, etc.
Benefits of Investing in Townhomes for Rent
If you are unaware of the benefits of investing in townhomes for rent, here are a few,
1. Lesser Maintenance Responsibility
When purchasing a Townhome style community, you can budget to hire a strong administrative and operations team to handle the day-to-day operations.
2. Larger Space
Space is an essential feature that families look to when renting. Townhomes offer more space than traditional apartments and include several features they typically do not like multiple floors, private garages, and private yard space.
3. Steady Demand
There is no shortage of demand from a typically strong tenant demographic which consists of higher-income earners and families seeking a quiet and safe environment. They tend to sign long-term leases which means you can expect them to stay for an extended period which reduces turnover costs.
4. Steady Income Stream
How to know if a rental property is a good investment? An investment that generates a steady cash flow and a positive return on investment is good. Townhomes for rent generate more income per unit than typical apartment rentals.
5. Value Appreciation
The value appreciation of townhomes for rent over time is generally greater than standard apartments but not as much as single-family homes. Their market value depends on the property’s local market conditions and demand. If your townhome community is in a desirable location and has a good living environment, it will appreciate at a good clip.
How Do Invest in Townhomes For Rent Communities?
Investing in townhomes for rent is an excellent way to grow your net worth but it requires time, money, and commitment. You must choose a property, negotiate its purchase, develop a solid operating plan, and then execute it to a high degree of success.
Finding a reputable property management company that can help manage day-to-day operations is a good consideration. At Summerfield Property Management we manage apartment communities that are 50 units or larger and we are experienced with managing townhome communities. We would love to setup a time to discuss your portfolio!
Townhomes for Rent: Conclusion
Investing in townhomes for rent communities offers numerous advantages, from higher rental rates to strong demand from a desirable tenant demographic they are a smart investment opportunity.
It is not as easy as it sounds, investors must remember that investing in rental property is a long-term commitment that requires you to do proper research, develop market expertise, and find and secure good properties. Aligning with a good property management company can go a long way in supporting your success with a townhome community investment. Book an appointment with Summerfield Management today!
Townhomes for Rent: FAQs
Q. When can increasing rent be perceived as illegal?
A. If you are targeting a specific protected class with a rental increase it is illegal.
Q. What is rent control?
A. Rent regulation or rent control is when a jurisdiction puts laws in place that limit how much a landlord can increase the rent within a defined period of time.
Q. What is the BRRRR method in real estate?
A. The BRRRR method is probably the most commonly used real estate investment strategy. It stands for Buy, Rehab, Rent, Refinance, and Repeat. It is a strategy of fixing a distressed property, renting it to tenants, and refinancing it to pull out your initial equity investment and if possible reinvest in another property.