Multi Family vs Single Family Homes

As an investor in rental properties, you have options. Multi-family housing or single family housing? It's not a clear-cut decision.There are positives to each and there are negatives to each. It all depends on your needs and your preferences as an investor.

Up front, multi-family housing units cost much more than single family homes, since they're typically larger. However, an investor will receive higher cash on cash returns on multi-family units since there are more tenants.

Purchasing single family homes is normally easier and cheaper than multi-family homes. Sellers of single family homes tend to be people who were actually living there rather than investors looking to make a profit. In some occasions, sellers are under the pressure of their emotions and are just looking to sell and might be willing to take a lower price than they would have otherwise. Sellers of multi-family homes tend to be investors who are looking to make a profit and will fight for the best price they can get.

Rent tends to be less on multi-family housing which means your property will appeal to a bigger group of renters. While on the other hand, higher rents mean you'll attract typically older and possibly more reliable tenants.

Owning single family homes usually means fewer conflicts. Tenants living in close quarters with common areas and usually nothing more than a wall between them are prone to fighting with their neighbors.

Generally, losing a tenant in a multi-family housing unit isn't a big deal as there are other tenants in the building still paying rent. A tenant moving out of a single family home means downtime where the owner isn't making money from the unit.

In a single family home, there is usually only one meter for each utility meaning that the tenants can pay for their utilities themselves. Multi-family homes usually only have one meter for the whole building so, it's typical for the landlord or owner to pay some of the utility bills.

Be patient when looking for your investment property! Assess your needs and your financial abilities before diving in. Know what you're capable of and what you're looking for in an investor experience and you'll be able to find the property for you.
Beware of rental ad scams: Rent Jungle is a rental search engine for apartment hunters and is not responsible for the content of rental listings found on the site. Rent Jungle encourages you to use common sense while apartment hunting. Beware of fraudulent listings. Click here to learn about common scams.