House or an apartment/condo/townhouse as your first rental?

[Ana Franchi]

Good evening every one.

I’m planning to invest into my first rental property, I got pre-approved for my first mortgage loan for about $300k for a residential property, so I’m going to live in that place for a year or two then rent it out.

I’m currently looking to buy in North Carolina - Raleigh, Cary or Wilmington.

And I’ve got couple questions.

Is it more profitable to buy an apartment, condo,townhouse and rent it out, OR to buy a house to rent out?

And is getting a three bedroom (apartment or a house) would give you less chances of finding renters, versus if you buy one bedroom apartment or a small house? I feel like the smaller the place (therefore the cheaper the rent), the easier it would be to place the tenants. Or am I wrong to think that way?

I’m very new to this so I’d like to make my decision wisely, and would highly appreciate any advices and suggestions I can get from anyone.

Thank you very much everyone in advance!

[Brandon Vanderford]

As a property manager in the Triangle, I have some clients who only invest in SFHs (they prefer more flexibility and lower/no HOA fees). But I also have clients who only invest in townhomes (they like not having any grounds maintenance and not having to worry about exterior maintenance, including roofs, siding, etc). If you buy a townhome in an association that is operating well (e.g. has plenty of reserves for capital improvements and no deferred maintenance) then as long as you are cash-flow positive after HOA dues are paid (and you budget for potential increases) then townhomes can be an easier property to manage.

To answer your question about finding renters, I would say that 3/2 rentals are the best rentals. There is a niche market for 1/1 rentals, but most people want a little more space (either a kid's room, or a home office, or even just space for furniture that they want to hold onto). 

Best of luck in your investment journey! Happy to discuss further.