Should you buy an investment property located in a community or a single family home that's not part of a community?
Below is a list of some potential advantages of investing in a community versus a property that's not in an investors based community of property owners - there are communities that are focused on selling condos or townhouses to investors:
| Communities |
Single-Family Homes |
| Properties located in great, well-researched investment markets |
Properties located in markets that may or may not be good
investment markets |
| Properties located in excellent school districts |
Properties may or may not be located in good school districts |
| Properties located in high visibility area for good rental |
Properties generally located in low-visibility residential areas |
| Properties well-marketed and advertised online and in local media with full page, 4-color ads and good signage |
Properties usually rely on individual ads and haphazard signage |
| Properties built with amenities to attract renters, like pools, fitness rooms, business centers, etc. |
Properties may or may not have amenities to attract renters |
| Properties built for low maintenance |
Properties built for homeownership, not low maintenance |
| One loan for multiple rental units |
One loan for each single-family home rental |
Institutional-quality, professional property management included
|
Must find, interview, hire and manage local property
management company |
| One property management company for all properties |
Different property management companies for each property if
located in different markets |
Consistent and uniform on-site and preventative maintenance
|
Offsite property management means haphazard maintenance
|
Uniform maintenance preserves the property value and enhances the rental income
|
Property value and rents can easily be negatively impacted by the quality of neighbors’ maintenance |
| Renters thoroughly pre-screened |
Renters may or may not be pre-screened
|
| Cash flow even if all units are not rented |
No cash flow when vacant |
Generate higher cash flow than single-family home because of
multiple units Ex: Four 1000 square foot units on average could bring in rents of $3600 a month vs. rents of $3,000 a month for a 4,000 square foot single-family home |
Generate lower cash flow than multifamily units do. Ex: One
4,000-square-foot home on average could bring in rents of
$3,000 a month vs. $3600 a month that could be generated by four 1,000-square-foot units |
| High quality property insurance with premium coverage at reduced rates |
Property insurance only available to individual investors |
|
