Benefits of Investing in Residential Property
Lower Cost of Entry.
It may seem daunting to save up enough money to invest in a commercial property. A good compromise to this is to invest in residential properties. A person may have enough in savings to purchase a house or duplex and rent it out. Over time, after you generate enough income, you can take your capital and invest in other residential buildings, or take it up a notch and invest in a commercial property.
Decreased Tenant Turnover.
In the volatile economy we currently have, businesses may come and go, but families renting from single family homes tend to stick around longer. As long as you are quick to deal with tenant issues, keep a clean property, and have a fair rental fee, your tenants will be loyal for a long time. When interviewing applying tenants, get to know them and to see who are more likely to be long-term renters.
Better Zoning Laws.
With commercial properties come commercial zoning laws. These laws make building, renovating, and leasing a lot more difficult than the zoning laws for residential homes, where the rules are more lenient.
Economic Crisis? Not as Big a Deal.
During an economic turn-down, businesses are the first to go. If you own commercial real estate, you might see some of your tenants file bankruptcy and be forced to leave, not fulfilling the length of their lease. If you own residential real estate, your tenants won’t feel the wallet squeeze as quickly. Also, if your tenants leave, there are usually other people looking for homes. Your residential real estate is more likely to stay filled compared to commercial during down economic times.