Investing in older single-family homes to be implemented as a rental property can be a successful strategy. But there are all kinds of pros and cons that come with using older homes instead of new ones. For instance, older homes usually are in a great location, lower purchase price, and a more stable market rate. But there are also obstacles to redeeming an older home, for instance a higher cost of repairs and improvements, lower energy efficiency, and the risk of losing out on widespread renter appeal. When probing for your subsequent investment property in Radford, both the pros and cons should be considered carefully before making any final decisions.
There are countless rewards when opting for older homes to use as rental properties. Perhaps one of the best advantages an older home offers is the location. Contrasted with newer homes that tend to be situated away from plenty of the area’s best amenities, older homes can often be found within a short distance of desirable social and commercial areas. For Millennial renters, young professionals, or seniors ready to delight in their retirement, a rental home with unproblematic passage to the city center or other areas can be a mighty strong lure. Older properties also tend to be found in prominent neighborhoods, which customarily have more predictable rental rates. Being able to reliably forecast your rental income is one of the most imperative benefits of picking up an older home.
In many prominent neighborhoods, older homes are usually found to be more affordable than new construction. This can lower the upfront cost of the property and allow investors to control how much capital is depleted on any improvements or upgrades. Although an older home will in all likelihood need some work done, investors can control costs by choosing to do some of the work themselves or by scheduling projects to maximize cash flow. Trusting on the age and condition of the home, investors may also be able to depend on better construction and a more proven floor plan. Such features may entice specific demographics, particularly renters looking for a home with a unique look or feel.
Although these subsidies can make older homes an attractive option for investors in Radford, there are also some drawbacks. Older homes tend to have outdated heating and cooling systems, plumbing and wiring problems, and so on. They may also have code compliance issues, which can be an expensive fix. Windows in older homes are often less energy efficient than newer ones, creating higher energy bills and making it difficult for tenants to control the temperature inside the home.
Unlike basic maintenance and repairs, older homes bear the uncertainty of expensive updates and improvements to make the home both safe for users and attractive to potential tenants. The more expensive upfront costs may culminate in a short-term strain on your cash flow, making it necessary for investors to feel good about funding repairs, big or small.
Another potential disadvantage of buying an older home could be the kind of neighborhood. It is imperative to gather detailed information on a neighborhood before buying a home there, probing conscientiously for signs of neglect. Repeatedly, the locale in which the home you’ve chosen may be due for a water main or sewer line upgrade, and these projects ordinarily come with a hefty special assessment or tax to the owner that needs to be paid quickly. If the location is in deterioration, property prices may be low but so too might be the home’s expected future market value.
Older houses can make excellent investment properties, but they can also drain an investor’s finances. While old houses offer countless features that newer homes do not, careful evaluations and market assessments are an absolute necessity. At Real Property Management Insight, we can help investors evaluate and vet potential rental properties as well as prepare meticulous information about the home’s neighborhood and the current state of affairs in regards to the rental market in Radford. We are genuinely eager to help real estate investors make optimum investment decisions. Contact us online or call 540-998-6917 for more information on how we can help you.
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.