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  • Mahmood Usmani

Single Family Residential Focus: Why?

In residential real estate investment, there’s always contention between investors that prefer single-family investment properties and those that prefer multifamily investments. Though each investor will always have their own preferences, and personal finance factors weigh in on this investment decision as well, either way, each will have its pros and cons. In examining the Dallas market, and those in San Antonio, Austin, and Houston as well, we at Provision Capital have chosen to center our focus on single family residential investments.

Though the term is virtually self-explanatory, we will go ahead and introduce the concept of single family residential investments for the sake of being thorough: these are detached properties in which only one family or tenant lives. As an investor you are buying homes and renting out the entire home to a single family or tenant or the term of a lease.

Single family homes are a solid and relatively safe investment in the real estate industry, and are a burgeoning market in our geographic areas on which we focus at Provision. There are many basic benefits to single family investments such as a low barrier to entry, and lower costs, in comparison to starting off investing in a massive and costly multifamily apartment complex, though that is eventually the goal.

We at Provision, in discussing the pros of single family residential investments with our clients, strive to focus on the smaller projects where risk is lower and return is higher. Even though some may see one drawback in the fact that we are doing a lot more individual properties, one by one, whereas in commercial you can invest in a large quantity.

At Provision, we take our cues from the market, to ensure the best return on our clients’ investments, and firmly believe that commercial real estate is directly linked to the highs and low of the market. Thus, right now, we feel that commercial real estate is overpriced in the current market. Though we intend to branch out into commercial real estate in the future, with the market conditions the way they currently are, we have decided it is not the best idea for the firm and our clients. We want to protect our clients’ investments from the market, just in case it goes down, because rental demand for single family residential properties, especially in the Dallas area, will remain healthy. Thus, we feel single family residential is a good hedge against the market and the best investment for our clients.

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