Real Estate Investment Property Spotlight: Laned Homes
Whether you’re buying your first investment property or your tenth, it’s smart to consider the types of homes available. We think that laned homes are one of the best choices out there. Homes like this are an easy investment because they come with a low cost and a high rental rate. Even if you’ve preferred investing in other types of homes, now’s the time to give laned homes a closer look.
The Picket Fence Dream
Laned homes appeal to renters for the same reasons they appeal to more traditional buyers. Without the large garage taking up space at the front of the home, you’re able to have a home that has the traditional look that most people think about when they imagine where they want to live.
Laned homes are especially nice for families. They tend to have a lot more space than traditional apartments, and they have added features like a backyard and extra storage space that you can’t find in a lot of rental units.
At the same time, they don’t have to deal with the hassles that come with regular homeownership, like making repairs. With this type of appeal, you’ll find that your home doesn’t stay vacant for long, and you’ll be able to command high rates.
Income Suite Options
In a laned home, you have options for creating multiple income opportunities. You can simply rent the property on its own, but for just a bit of extra money, you can finish the basement into an income suite, complete with a separate entrance. You can also usually opt for a garage suite above the garage that’s across the lane. Some investors even do both.
It’s all about the image you want to create for your home and the type of renters you’re hoping to attract.
More Privacy for Renters
One of the reasons that renters tend to like laned homes is that they usually have more privacy. This is especially true when you don’t have an income suite in the basement: just the main home and the garage suite. In other types of rental units, like townhomes, duplexes, or homes with basement suites, the tenants can feel like they’re on top of one another.
They’re sharing walls or entryways, and this just doesn’t have a lot of privacy. Most people simply recognize this as one of the prices you have to pay for renting, but others want a different experience.
In a laned home without a basement suite, tenants get the privacy of having their own separate space. If you have a suite in the garage, that tenant also feels like they have a more private space. It’s a win-win for everyone.
The Cost of Laned Homes
Laned homes tend to cost less than some of the other investment options, particularly for those who are looking for a separate and private feel for their tenants. Townhomes and duplexes are technically cheaper most of the time, but as an investor, you probably want to own the whole building. This means buying both sides of a duplex or a whole row of townhomes. Since you’re buying more homes, you have a much higher initial cost.
Laned homes, though, typically cost much less than $400,000, even when you‘re adding the option of a basement or garage suite into the build. These are also a good choice for those who are just getting started and are thinking about having an income suite as part of the build for their family’s home. You can get all of the privacy that you want in the main home while earning income from renting out the garage suite.
Possible Cash Flow
Of course, you’ll want to get a sense of just how much money you can earn with a laned home. Obviously, this varies depending on the cost of the home, but we’ve calculated an example from one of our most popular models.
The $389,900 purchase price includes a basement suite and the main home. The total monthly payment on this type of mortgage (assuming a 20 percent down payment) would be around $1,755, including property taxes and insurance. At current rental rates, you can likely charge $1,400 for the main part of the home and $900 for the basement suite. This leaves you with about $445 extra. While it’s always smart to save for repairs, that’s not usually a problem in brand-new homes, so you should be able to pocket most of that money – or save it to invest in your next home.
Getting started investing in real estate is easier than you might imagine. At Sterling Homes, we can show you which models are going to make you the most money. Call us today to find out more.