Notice: Trying to access array offset on value of type bool in /home/customer/www/blackrenorthwest.com/public_html/wp-content/themes/Divi/includes/builder/functions.php on line 2592
Seattle Real Estate Advice Archives - Black Real Estate Group
Refer Black Real Estate
Investing in Single-Family Homes

Investing in Single-Family Homes

In my 20+ years of real estate investing the prime driver in my portfolio has always been the single-family home, whether that be owner occupied, long term rental, or vacation rental. If you focus on the right fundamentals it is a fantastic vehicle to grow wealth and passive income.

Why the Single-Family?


First and foremost, the competition for these homes is less than for multi-family housing. I’m often competing with first time buyers who are generally less knowledgeable about the investment side of a purchase. Anyone who has worked with me knows my love of the mid-century rambler. These are the post war homes that were built as baby makers during the 50s and 60s boom after World War II. They were generally built by small builders, with old growth lumber, and post war technology. For example, copper piping replaced galvanized steel, romex wiring replaced knob and tube wiring, and poured concrete foundations were poured considerably stronger. The baby boomers grew up in these homes and in the last 15 years or so I’ve seen a movement of these same boomers downsizing back into these homes as their children flew the nest. Kids of these boomers also love ramblers as their entry home, as do investors for their simplicity and quality of construction. For these reasons the mid-century rambler is an ideal play as an investment property..a great home to rent out with minimal overhead and a popular style to meet the needs of retiring boomers (with bad knees, hence the need for one level), their children, and investors.

Location, Location, Location


Another benefit to these this housing style is where they were built. Take North Seattle for example; the old city line is 85th Ave. Prior to the war, the city was already built out up to 85th and even further in some areas like Maple Leaf and up to Northgate Way, so the post war housing boom generally happened North of that in areas like Pinehurst, Jackson Park, Haller Lake, Olympic Hills, and Crown Hill to name a few. These communities have now become very popular for first-time buyers, empty nesters downsizes, and investors. They provide larger lots and cheaper prices per square foot while still being very close to the major employment areas of the city. This is where I often direct my clients looking for their first investment property.

Know your Numbers


Breaking down the numbers is just like you would do for a triplex. Calculate your gross annual income, back out expenses and vacancy to establish your NOI (net operating income), and then divide that into the purchase price (plus upgrades after closing if there are any) to determine your Capitalization Rate (Cap) or rate of return on your investment. A good number to shoot for is about 5-6 percent. The key to a good investment is to buy a great piece of dirt with a structure on it that you can improve with sweat equity and then let your tenants pay off the mortgage for you.

Whether it’s a single-family home near where you live or a vacation spot in a place you’d love to spend a month or so a year at then rent out the rest of the time, feel free to reach out to me if you’d like to sit down for a one-on-one to go over how to use real estate to build wealth and balance your portfolio!

Chelan: Vacation Rentals and Weekend Getaways

Chelan: Vacation Rentals and Weekend Getaways

Thinking about owning a vacation rental? Lake Chelan is a great choice for many reasons. The average number of nights homes are rented per year in the Lake Chelan area is 110, with June-September being the peak season. As an owner, those numbers can provide you with enough income to cover all your holding costs and still have over 200 days a year to enjoy the home yourself. There are three different zones (Chelan, Manson, and unincorporated Chelan) and each have their own set of rules regarding property rentals. If you want to learn more about the different regulations, just give me a call.

Besides all the water recreation activities and its great weather, Chelan is also home to over 35 wineries, great hiking, cross country skiing in the winter, a casino, and a great small-town vibe. The two towns of Chelan and Manson offers a wide range of eating experiences, shops, a bowling alley, and movie theater. There are festivals year-round and it’s a beautiful place in all seasons. Below are a few of my favorite spots to hit when I’m in the area.

Sunset Bar and Grill

Located in Mason, the Sunset Bar and Grill is a great spot for a casual night out. They have a full menu with items like burgers, pizza, and pasta to go along with your beverage of choice. They also have plenty of TVs if you’re looking to catch a game and during the summer you can sit out on the patio and enjoy the weather.

Blueberry Hills Farm and Restaurant

It’s a family owned and operated 20+ acre farm with more than 16 different types of blueberries. At the farm, you can buy plants, pies, tea, and more. But my favorite part of Blueberry Hills is their restaurant, which is open Wednesday through Sunday 8am-3pm. They have a great breakfast, which is served all day, and my go-to is their Danish yeast Waffles. During the warm months, you can sit outside in the middle of the field and enjoy the view of the mountains while you eat.

Wineries

As I mentioned earlier, there are no shortage of wineries in the area, but I’ll give you my top three recommendations: Cairdeas Winery, Lake Chelan Winery, and Hard Row to Hoe VinyardsWhile they’re all great spots for a glass of wine, Hard Row to Hoe has the best story for how it was named – in the 1930’s a Manson resident ran a rowboat service between Lucerne and Point Lovely for the miners to get to the brothels. 

Stehekin 

Located in the heart of the North Cascades, take a trip to Stehekin on the Lady of the Lake. You can explore for the day, traveling on the red bus to see the 312-foot rainbow falls or take a guided fly fishing tour, or stay the night at The Lodge. 

If you’ve read this and are sold on a trip to Chelan for the weekend to test the waters and see what you think, I’ve got a place you can stay, just click here. And if you’re ready to look at buying a vacation rental for yourself just give me a call, I am here to help!