Should You Rent Out Whole Houses As A Landlord?
Posted on: 10 November 2021
When you think of yourself becoming a landlord, you probably picture yourself owning several apartments and renting them out to tenants. Indeed, this is the approach many landlords take. However, some landlords do buy entire homes and rent them out. This approach, while less popular, does have some advantages as described below.
You'll have fewer tenants to deal with.
Managing tenants is a big job, and the more tenants you have, the more work it becomes. Having three or four tenants is a totally different situation than having twelve of them. If you buy and rent out several houses, you'll be able to make more of a profit on each house, so you won't have to rent out as many individual units as you would with smaller apartments. This leaves you fewer tenants to keep track of, which means you'll spend far less time managing those tenants.
You can find homes that are in better shape.
It's no secret that rental units tend to get worn out and damaged over the years. So, you may have trouble finding duplexes and apartment buildings that don't need a lot of work and maintenance already. On the other hand, there are plenty of single-family homes that have been nicely maintained. Even if the homes were used as rentals before, turnover tends to be lower in whole-home rentals, so they're probably in better shape. It's nice not to have to rehab buildings before you have tenants move into them.
Turnover tends to be lower with whole-home rentals.
As mentioned above, tenants who rent whole houses tend to stay in those houses longer. These renters are usually young professionals or families with kids. So, they want to stay in the same area for longer than a few months. Slower turnover means fewer background checks, fewer appointments to show the rental between tenants, and less work for you overall.
You can sell the homes as live-in units one day.
If you decide you want to get out of the rental business, you have more options to sell whole homes. The buyer could be another landlord, or they could be someone looking for a home to live in. When you sell multi-unit buildings, you only ever sell to other landlords, which means your price may be lower and it may take you longer to sell.
Should you rent out whole houses as a landlord? If the benefits above sound appealing, then the answer is "yes."
For more information on home rentals, contact a company near you.
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