Investing in older single-family homes to be put to use as a rental property can be a successful strategy. But there are a huge amount of pros and cons that come when embracing older houses rather than the new ones. For example, older homes consistently are at a great location, lower purchase price, and a more stable market rate. But there have also been limitations to investing in an older house, along with a higher cost of repairs and improvements, lower energy efficiency, and the risk of losing out on widespread renter appeal. When searching for an upcoming investment property in Rigby, both the pros and cons must be considered carefully before making any final decisions.
There are endless merits to picking up older homes to use as rental properties. One of the gains an older home offers is the location. Contrary to popular belief, newer homes tend to be isolated from a great number of the area’s best amenities, whereas older homes can often be found within a short distance of the desirable social and commercial areas. For Millennial renters, young professionals, or seniors searching for a place for their retirement, a rental home with quick and easy passage to the city centre or other areas can be a strong motive. Older properties also tend to be found in respected neighborhoods, which habitually have more predictable rental rates. Being able to reliably forecast your rental income is one of the most indispensable benefits of buying an older home.
In many locales, older homes show that they are more affordable than new construction. This can enormously lower the upfront cost of the property and allow investors to dictate how much is spent on any improvements or upgrades. While an older home will no doubt require some gruntwork, investors can control costs by choosing to do some of the work themselves or by scheduling projects to maximize cash flow. Banking on the age and condition of the home, venture capitalists may also be able to depend on the sophisticated reliable framework and a more accepted floor plan. Such properties draw in various demographics, particularly renters looking for a home with a unique look or feel.
While these merits can make older homes an attractive option for investors in Rigby, 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 Older homes tend to have outdated heating and cooling systems, plumbing and wiring problems, and so on.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 carry the risk of expensive updates and improvements to make the house both safe for renters and attractive to potential tenants. The more costly upfront costs may result in a short-term strain on your cash flow, making it important for investors to feel positive about funding repairs, big or small.
Some familiar potential disadvantages of buying an older home could be the composition of the neighborhood. It is important to gather detailed information on a neighborhood before buying there, scrutinizing carefully for signs of neglect. Oftentimes, the locality in which the home you single out may be due for a water main or sewer line upgrade, and these ventures predominantly come with a hefty special assessment or tax to the owner that needs to be paid off right away. If the sector is in descent, 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 turn out to be a strain on an investor’s finances. While old houses present endless features that new homes do not, careful evaluations and market assessments are an absolute necessity. At Real Property Management Southeast Idaho, we can help investors evaluate and vet potential rental properties as well as impart specific findings of the home’s neighborhood and the current state of affairs in regards to the rental market in Rigby. We are wholehearted in helping real estate investors make the best investment choices. Contact us online or call 208-522-2400 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.