THE BIG PICTURE
INVESTING STRATEGIES
Singular Attraction NOTHING IS AS EASY TO BUY, SELL, RENT AND MANAGE AS SINGLE-FAMILY HOUSES.
by RJ Palano
S
ingle-family houses are the easiest to understand of all real estate
real estate investments. Commercial real estate investments also require more so- phistication, are more difficult to find, are more difficult to exit and have more risk associated with them.
and the exit plan. The biggest distinction between the exit plans of single-family houses and commercial real estate is the end user. You see, the end user can be an investor who rents it out, but a homebuy- er who wants to live in a property will pay more money for it. Homeowners buy for emotional reasons, and that will always fetch a higher value in the right areas. A good example is a home in Villa Rica, Ga., which we acquired in mid-2014. We paid $104,000 for the property, and we rented it out for $1,300 per month. Our tenant moved after one year, and the next tenant bought it after just three months of tenancy for $180,000. This property
investments and the easiest to liquidate. Most people in the United States live in houses, so we are familiar with the care and maintenance a home requires. The thing about houses that makes them so attractive as an investment is that they provide cash flow, appre- ciation and a hedge against inflation. They also have a low barrier of entry. A well-located investment house in the United States typically falls into the $100,000-$200,000 price range. Relatively speaking, that’s a low price point for entry compared to commercial
THERE’S NOTHING LIKE SINGLE-FAMILY I’ve dabbled in apartments and
mixed-use buildings that included offices and apartments. Nothing—and I mean nothing—was as easy to buy, sell, rent and manage as single-family houses. The problem with commercial real estate is really centered on the financing
44 | think realty magazine | may :: june 2016
Made with FlippingBook Online document