October 13, 2020

4 Reasons to Build Your Single-Family Real Estate Portfolio Today

The reason why Single-Family Real Estate Properties are not being purchased and invested on is due to unfamiliarity of the concept. What makes a single-family property is the land that runs with the title to the property itself. Pulling out the deed of the house will explain that both the house and land are on one ownership.

It may not seem like one of the largest contributors in the real estate industry due to its connotation, however, it is evident that the majority of the biggest assets are from this bracket. Approximately $3 trillion would cover the aforementioned and as a real estate investor, this may be something that you would want to consider.

With that being said, it makes it crucial for investors to take advantage of the low rates in purchasing single-family properties. Building a real estate portfolio is the bread and butter that can lead you towards your growth and success in the industry, however, the advantages of structuring and realigning your portfolio to include single-family rental homes will drastically outweigh multi-family investments. Now, let’s dive into 4 key reasons why you might wanna take advantage of the strategies that come along with Single-Family Rental Homes.

1. Significant Returns in the Future

Single-family rental homes generally compromise more than one-third of the U.S. rental homes.  This fact, in return,  leads to a forecast of a huge spike in rental by 2030. With what is currently happening to the economy due to the pandemic, we can notice the trend wherein the demand is not meeting the supply. This exchange shows great profit in the growing single-family property market moving forward. 

2. Always Worth the Investment

Single-family real estate investments are ideal and pivotal for people who want to create supplemental income for their retirement. Targeting Single-Family Property (SFR) is peeving its way through showcasing substantial annual growth therefore securing returns. Since the ownership covers a lot more in comparison to Multi-Family Properties. Another reason why it’s worth the investment is that the ongoing stability allows you to make riskier investments from then on.

3. Can Take Tax Breaks

As a single-family real estate investor, you are eligible to enjoy some tax breaks by simply keeping each property for at least one year as you build your portfolio. Since the form of investment is long term, it allows investors for heavily reduced capital gain taxes the longer you hold on to it. This in return makes it easier when you sell the property in the future.

Another method that allows you to take tax breaks with Single-Family Properties is depreciation. When you’re investing in single-family homes that you intend to have rented out for additional and sustainable income, you can take an annual tax deduction in the sum of the value of the building itself divided by the years of the structures used.

4. Higher Rental Rates

One of the most obvious reasons why you have decided to build your portfolio and embark in the real estate industry is to generate a hefty income. Single-Family Properties can charge just as much as apartments or even more. This is on top of paying utility bills that are shouldered by the tenants of your space. The true comparison is when you are having a building rented out with extra fees due to the size and capacity that it can hold/

These four reasons that lean towards investing in Single-Family Properties showcase the benefits of why building a portfolio with such places within your roster has proven to show the highest rate in return of investments. If you are planning to excel and grow in the industry, then this should be an option that you can plan on taking advantage of.

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Disclaimer: The blog articles are intended for educational and informational purposes only. Nothing in the content is intended as legal or financial advice.