Your Atlanta Property Management Company Explains Real Estate Investing

As the top Atlanta property management company, we often advise individuals who want to get started in real estate investing. We hear questions like, Should I invest in a single-family rental home or a multi-family property? How do I find the right rental property? Or, How do I know I will make money on my investment property? Get your real estate investment questions answered below and start investing with confidence.

Single-Family Rental Home vs. Multi-Family Property

Will a single-family rental home or a multi-family property yield a better return on investment? The truth is, both are great investment plans and both have serious pros and cons to consider. Specialized Property Management Atlanta is a leader in the management of single-family rental homes, but that isn’t all we do. We also have experience managing multi-family properties such as duplexes, triplexes, and four-family homes. From our experience, here is how each home type can benefit you.

Multi-Family Property

  • More units usually means more rental income each month. 
  • One vacancy isn’t an emergency because costs are offset by the other units.
  • Certain costs, such as a roof replacement, are lower because they are charged per property rather than per unit.

Single-Family Rental Home

  • Typically located in nicer, family-friendly neighborhoods.
  • Tenants usually stay longer in a single-family rental. Reference your property manager for details.
  • Single-family homes appreciate faster than multi-family units.

What about the downsides of owning a single-family or multi-family property? Here are the obstacles some property owners encounter with each type of investment.

Multi-Family Property

  • Multi-family units don’t age as well, meaning your cash flow could be eaten up by maintenance costs over time.
  • These units tend to experience more turnover, which is costly.
  • Multi-family properties do not appreciate as fast, so if you plan on selling the property eventually you may not make as much on your investment.

Single-Family Rental Home

  • You may not make as much rental income per month as you would make with all units of a multi-family property fully rented.
  • Turnover and vacancy days are expensive, without any backup income from your other units to offset costs.
  • Maintenance and other expenses on several single-family rental homes will cost more than maintenance on one multi-family property.

There are obviously a lot of pros and cons to consider when buying a single-family or multi-family property. For more information about the factors we listed above, contact our property managers today. 

Tips On Financing From Your Atlanta Property Management Company

If you are planning to finance your real estate investment, there are a few things you should know about financing a single-family home vs financing a multi-family property.

  • Personal vs Investment Financing: Financing a rental property is different than financing your personal residence. If you do not intend to occupy the home you are buying, your mortgage lender may require a larger down payment, or shorter repayment period. In most cases, you cannot use your future rental income to help qualify for your loan. Some rental property owners get around these rules by holding onto their personal residence to use as a single-family rental home when they move. In this case, they can easily qualify for a new mortgage on their new personal residence and begin renting out their old home as soon as they are gone.
  • Number of Mortgages: If you are considering financing multiple single-family rentals, reference your mortgage company’s policy on limits to how many mortgages you can hold. Many mortgage companies limit property owners to 10 mortgages. Keep in mind that financing a multi-family property is done with just one mortgage. That means if you have 10 multi-family properties with 5 units each, you could have 50 rental units. If you have 10 single-family rental homes, you have to stop expanding until you pay off at least one of the mortgages.

For more information on financing your rental property check out this article by Bankrate here.

A Note On Real Estate Trends

It is impossible to predict the future of real estate, but after over 30 years in rental property management, we can provide insight into current trends and how to take advantage of them. When we first started out as an Atlanta property management company multi-family units and large apartment buildings were popular rentals. Individuals who invested in single-family homes typically flipped the homes instead of holding onto them for rental income. These days, single-family rental homes are becoming more popular, especially for young families. Investors are realizing that single-family rental homes also offer specific benefits such as:

  • Tenants take care of a single-family rental home better, viewing it as their home rather than just a place to live.
  • Tenants take care of certain aspects, such as landscaping and utilities, reducing your costs as a property owner.
  • More renters are seeking out single-family homes because they provide the freedom of renting with the space and lifestyle of home ownership.
  • Single-family rental homes are easier to sell when you are ready to cash out your investment.
  • There is less turnover in single-family rental homes than multi-family properties.

Real estate investors are learning that single-family homes tend to be a more stable investment path. Investing in a single-family rental home can provide you with an excellent long-term financial strategy.

Find the Right Property With Help From Your Atlanta Property Management Company

When you’re ready to start looking at investment properties how do you know where to start? As local real estate investment experts, our team can help you find the perfect rental property. To start your search, here are some tips:

  • Location, location, location. Make sure the property you buy is in an attractive location, close to good schools, shopping, and transportation. 
  • Check HOA rules before you buy. Some HOAs have a limit to the number of rental homes operating in their neighborhood. Check HOA bylaws before you purchase a rental property.
  • Look for attractive features such as a standard layout, 3 or more bedrooms, laundry hook-ups, and a fenced-in yard.
  • Properties that are over 15 years old will need more maintenance than younger homes. Try to find a home less than 15 years old, and talk to your property manager about how much you need to set aside for yearly maintenance costs. 

For more tips on finding the right rental property near you, contact our team of real estate experts.

Making Money On Your Investment

How can you ensure you will make money on your single-family rental? References from your tenant, pricing your home competitively, and responding promptly to your tenant’s calls are all ideas thrown around online. However, these ideas don’t give the full picture of what goes into making a rental investment a success. At Specialized Property Management Atlanta we have almost 30 years of experience managing rental properties. We know that a successful rental property starts with avoiding these common landlord mistakes:

  • Extended vacancies: Extended vacancies are expensive. Avoid them by pricing your rental correctly, advertising efficiently, and getting your home rent ready before showing.
  • Poor property selection: Buying the right rental property will help you bring in a wide variety of applicants.
  • Choosing unqualified tenants: Proper tenant screening, including background and credit checks, will help you place a reliable tenant.
  • Poor tenant interactions: Managing a rental property is about relationships. Unpleasant interactions with tenants causes turnover.
  • Inefficient maintenance: Overlooking needed maintenance, or ignoring your tenant’s maintenance requests, results in expensive issues with your rental home and angry tenants.
  • Inadequate rent collecting: Strict rent policy enforcement is necessary for any successful Atlanta property management company. Electronic record-keeping makes life as a property owner much easier.
  • Regulatory violations: There are laws and codes for almost every aspect of investment real estate. Violating regulations can lead to expensive fines.
  • Failing to perform property inspections: Inspecting your rental property quarterly is recommended to ensure lease compliance and catch small maintenance issues before they turn into big problems.

By far the most common mistake you can make as a property owner is not seeking help when you need it. Managing rental property isn’t as easy as it looks on the surface, and even small mistakes can end up costing you a lot. Avoiding these costly mistakes is the key to a successful real estate investment.

Call Specialized Property Management Atlanta Today

At Specialized Property Management Atlanta, your real estate investment is in good hands. As we mentioned above, Specialized Property Management Atlanta started when single-family rental homes were not a popular investment choice. By starting then, we were able to develop a specialized management style attuned to the needs of single-family rental homeowners and tenants. While other Atlanta property management companies are just getting started in this growing market, we have already perfected our processes. Our experienced professionals and proven processes will ensure you experience the best parts of real estate investing, without worrying about making mistakes.

Get started today by calling us for a rental quote at 404-596-8454.

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