I love single story homes for a number of reasons we’ll outline below, even though for my personal home, I tend to be attracted to 2-story properties.
Growing up on the east coast, every home I visited always had stairs. When you live in an area with limited space, builders have no choice but to build up. I have fond memories like most kids of running up and down the stairs, or playing in the basement; even pretending the stairs was some type of indoor slide. Outside of being a kid, stairs provide a number of benefits to adults too. Two-story homes allow for soaring open air living spaces, beautiful balconies in and outside the home, and front elevations that give homes a "grander" curb appeal. But apart from the improved visuals of the home and extra square feet from floors stacked on top of each other, that’s really where the benefits end to having a two-story home.
The Downsides to 2-Story Homes
Heating & Cooling - open air floor plans that go to the second story can waste a lot of heat and AC during the year, even in newer high efficiency homes. Heat rises and you can’t bend the laws of thermodynamics. So the upstairs always tends to be hotter, and the downstairs always tends to be cooler. In a dual zone house this means one unit is always working harder than the other. This is extra maintenance costs for you as the landlord, especially if you have a tenant that tries to get that one bedroom downstairs the same temperature as the rest of the house in the winter. HVAC maintenance kills cash flow.
Settling - If you’re going to buy and hold a property for a long term rental (10+ years) you will have to deal with settling and squeaky floors. While a minor annoyance if it’s someone’s own home, every time you turn the property over and have to show it to a new potential renter, the age of the home will show when people walk the house. If your property is in a area with bad soil, foundation problems often come up. A two-story home with foundation issues is more expensive to fix than a one-story home. You have more weight and potentially more cracks across two floors.
Water, Water Everywhere - If you have a two-story property the water heater will typically be in the attic and not the garage like a one-story home. I’ve lived in two separate homes where the water heater has cracked while we were away for the weekend. Not only is it a pain to fix a water heater in the attic, but the sheet rock damage to two-story ceilings are also expensive to get repaired.
Benefits to 1-Story Homes
Renovation - If you want to update an older kitchen with can lights or drop in a new light fixture, it’s easy with a single story home and attic access. If your kitchen is below a bedroom or second story bathroom in a two-story home, you won’t be able to easily make those updates. From hanging Christmas lights to security cameras, all of this is much easier on a single story home.
Heating & Cooling - A one-story home usually means one AC unit and not two. Less to fix and you typically have a more consistent temperature throughout the home.
Accessibility - People are living longer but knees are not. Single story homes make your property available to more renters who don’t want stairs.
So if you like the prestige of a two-story property, it’s fine; just keep it for your personal home.
From house.of.leaders on Instagram... Don't know if he actually said this, but it's an awesome quote from an awesome actor.
Arbitrage - The practice of taking advantage of a price difference between two or more markets.
Many people think of arbitrage when it comes to currency trading or even bitcoin prices on different exchanges. But probably one of the oldest forms of arbitrage has to be the buying and selling of real estate in different markets.
I remember moving to Texas on a short term job assignment in my early twenties. At the time, California was going through one of it’s booms and one of the top executives at the company was casually telling my coworkers over lunch how he was able to buy two homes in Texas for the price he would sell his home in California. If you ever wondered why it’s so easy for the rich to get richer, here is one of your answers. Buy at the right time in the right market and then take those gains to a burgeoning market to have your wealth grow like a virus.
This was over twenty years ago, and California home prices are even higher now and Californians are still coming to Texas in droves. Just look at Toyota North America moving their headquarters from California to Plano, Texas just north of Dallas.
As I sit here writing this post, House Hunters Renovation is following a couple looking at an 860 square foot bungalow for $599,000 in Eagle Rock, California (Los Angeles). The difference in properties across states is truly draw dropping. Even having been in real estate for many years, I still struggle to grasp the home prices in California and how people pay for properties. Being from the east coast, I say the same thing about New York. The Times just had a short article on 11 Hoyt, a 57-story condo in Downtown Brooklyn where just a studio residence will go for over $600,000.
If there is one tip I would give college graduates it would be to travel and even live in different cities early in your career. Find out what you like and don’t like and this will help you put together a plan to live and work in your ideal place. Going from an expensive market to a cheaper market is always a great move if you enjoy both cities equally and can take advantage of the cost of living differences. I’m right at the halfway point in terms of how long most people work in their careers and I can’t even imagine moving to a more expensive market now. With college around the corner and a recent health scare, I’d much rather stay where I’m at and continue investing in more real estate before the prices go higher. I’ve been to California many times, and love many areas of the Golden State, but it’s just not in the cards unless I become a dogecoin millionaire.
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