Single-family rental homes are always in demand, especially if they’re in a great neighborhood and well-maintained. When you’re thinking about acquiring an investment property in Los Angeles, consider a single-family home. It offers several opportunities for owners:
- Short-term rental income
- Long-term appreciation
- Tax benefits
- Stable tenant pool
While multi-family housing is growing in availability throughout Los Angeles, a single-family home is going to reliably offer investors higher rents, more tenant retention, and increasing value.
Location and Your Residential Rental Property
One of the key factors in securing a strong return on investment is making sure your purchase your investment property in an area that is desirable and growing. Location plays a huge part in your ROI. Fortunately, Los Angeles offers a number of diverse neighborhoods. This provides a great foundation upon which to capitalize on a single-family investment property. Owners can increase both cash flow and long-term ROI. We have some great neighborhoods and well-maintained communities, and both those things are required for any kind of positive return.
If you’re investing from outside of LA, make sure you work with a local Los Angeles property management company that can help you understand the local neighborhoods and communities. That expertise will make a huge difference in your ROI. You’ll need to know what the average rents are for single-family homes and what kind of expectations your tenants will have in terms of space, function, and design.
Higher Rents and Stable Tenants
The answer to how much you can earn depends on where you are as an investor. If you pay for a single-family home in cash, you’re going to enjoy some immediate cash flow and major long-term appreciation. Even if you leverage your investment, you’ll find there are plenty of options when you’re financing a single-family home.
To generalize, these are some of the most important influences on your residential Los Angeles investment property:
Single-family homes, on average, have higher rental values than apartments or units in multi-family buildings. Investors who own these homes find themselves earning more money every month.
Single-family homes in Los Angeles appreciate quickly. If you’re planning to sell your investment property in five or 10 years, you’re going to have a healthy return.
You’ll attract tenants who are interested in long-term rentals. Most residents who lease a single-family home will take an interest in maintaining it and treating the property like it’s their own home. You’ll have less vacancy rates and turnover.
These factors will lead to higher earnings. While the amount you specifically can earn will depend on your financial situation, your investment goals, and your property, you’ll find that the longer you hold your investment, the more you earn from it.
Consider HOA Costs and Regulations with Single-Family Homes
Single-family homes often come with higher rental values. But, you’ll likely have to consider HOA fees as well as HOA rules and regulations. Most single-family homes in the Los Angeles market are within HOAs or community associations. This means you’ll have to provide your tenants with a complete list of rules and procedures. You’ll be held responsible by the association for any violations. Typically, the homeowner pays the HOA fee, so you’ll need to factor that into your budget and your rental value as well.
If you’re thinking about investing in a single-family home in the Los Angeles market, we’d be happy to help you identify the best opportunities and run some numbers to establish what kind of earnings you can expect in the short and long term. Please contact us at EGL Properties.