Diversifying your real estate portfolio can serve several purposes. It allows you to reduce your risk and it also opens you up to additional opportunities. Diversifying a real estate portfolio is a great way to grow the value of that portfolio.
Maybe you have an entire portfolio of multi-family properties and you’d like to start buying single-family homes. That can give your portfolio more stability and potential for appreciation. If you have only invested in single-family homes in the past, this might be a good time to expand into multi-family homes.
There’s a lot you can do in the Charleston rental market and the surrounding areas, especially when you’re trying to grow your investment potential.
Single-Family Properties Offer Stability and Appreciation
A single-family home in Charleston is always a great investment option because they are always in demand among highly qualified tenants. You can typically charge more in rent for a single-family home than a multi-family property.
The tenants you attract with a well-maintained single-family home in a good location will want stability, and they are likely to take care of the home just like it’s their own. They are usually tenants who are interested in home ownership but prefer to rent because of the low-maintenance and flexible lifestyle it provides. Single-family homes appeal to tenants who want good school districts and proximity to commuter routes and shopping.
Single-family homes also offer investors some great appreciation potential. These types of properties may cost a little more when you’re buying, but they can always be counted on to increase in value, especially in South Carolina.
Multi-Family Investments for Cash Flow and Vacancy Protection
Multi-family properties are often duplexes, triplexes, or even small apartment buildings. Maybe you’ll want to buy one unit, a handful of units, or an entire building. There are plenty of options.
When you invest in a multi-family property, you’ll have more than one tenant in place, which means you have more than one source of rental income. This is the major benefit of investing in multi-family properties; you will have rent coming in from various sources. So, if one unit is vacant, you aren’t losing a lot of money quickly. You still have rental payments coming in from the other units.
Economy of scale is another benefit to renting out a multi-family unit. When you need maintenance or landscaping services, you can contract with a vendor who is likely to provide a discount because of the volume of work you need. You’ll save time and money maintaining a single building with two or three units.
In the Charleston market, there are a lot of diverse neighborhoods and plenty of properties that are different from those that you’re currently renting out. Don’t be afraid to think outside of your comfort zone. It can lead to a well-rounded, profitable investment portfolio.
Meridian Residential Group in North Charleston provides both single-family and multi-family property management in the Charleston, SC area, including in North Charleston, Summerville, Goose Creek, and Moncks Corner, among other cities.