Which types of real estate make the best investments?

Step-by-Step guide to buying an Investment Home in Austin Texas

This blog is the third part of a multi-part blog about buying an investment home in Austin. It is broken down into several different articles for ease of reading. This series is going to concentrate on investing in one-four family houses with an investment strategy of buy, hold, and rent. This is not a blog about flipping homes.

Why should I purchase an investment home in Austin?

Investment Real Estate vs Stocks

Which types of real estate make the best investments and why?

What is a property manager? Do I need one?

Which areas of Austin offer the best investments?

Learn the lingo of real estate investing

How to properly analyze if an investment home is a good investment

What is a 1031 Exchange, and how can it help me to succeed?

Asset Types

In residential real estate investing, there are two types of assets – Single family, and Multifamily. Each offers a number of advantages and disadvantages.

Single Family

This is by far the most common type of residential investing, and what most novice investors decide to buy. Single family homes offer a lot of advantages over multi-family homes. Single-family homes have a perception of being more desirable than a multi-family home. They tend to be located in better neighborhoods, have better schools, be more affordable, and also tend to attract a premium tenant. People that are attracted to a single-family rental are frequently the kind of people that want to try out a neighborhood then buy in a year or two.

However, there is one major disadvantage to owning single-family homes for investment. When a tenant vacates, there will be a period where the home is not rented. Your REALTOR©’s or property manager’s job is to quickly get a quality tenant in there.

Multi-Family

Multi-family is a broad term that describes housing that contains greater than one unit. For the purposes of this series, we are only going to talk about duplexes, triplexes, and fourplexes. Multi-family housing can come in a wide range of flavors, ranging from the apartment style to the townhome style.

I have seen town-home style duplexes where each side is a 3/3.5 or 3/3 where the rentals tend to go for $1,350 a month or more! These duplexes tend to feel more like a home rather than an apartment. 

Multi-family housing that is built in a townhome style is in my opinion one of the smartest investments anyone can make in real estate. I believe this because a duplex built like this offers the main advantages of single-family housing and offer the advantage of redundancy. If one tenant moves out, there is most likely another paying rent! This is also an attractive option for someone who wishes to owner occupy one side of the building and rent the other.

The primary disadvantage of multi-family housing is that duplexes and fourplexes that are desirable tend to be much more expensive than single family housing.

About Jordan Gouger

Jordan Gouger is a buyer’s agent with Keller Williams Realty’s South West Austin Market Center. He specializes in working with first time home buyers and buyers of residential investment properties. Among his areas of expertise are South Austin, Gracywoods, Quail Creek, North Central Austin, and Scofield.

 

Jordan places customer service above anything else and always goes the extra mile to help his clients achieve their real estate goals. He has experience working with out of town buyers and is able to help coordinate everything locally to ease your peace of mind. For all of your buying needs, please contact him at 512-693-9297 or jordan.gouger@kw.com