Property Management Blog

Multi Family or Single Family Investment Properties

Uptown Properties - Tuesday, December 11, 2018

Multifamily vs. Single Family Homes

Should you buy a single family home or multi family home when investing? Let's dive in.

Everyone has their own personal preference when it comes to investing, some people love mobile home parks, some people love commercial property, others like investing in duplexes, single family and many others.

Why single family homes?

You won't have a lot of problems associated with as many people living in one building, there is also the psychological effect for the family living there, and that is, they get to come home at the end of the day and they will always feel that " It's their House " for all intent and purposes. Whoever rents these properties would feel more like they own a home. This psycolocholical effects tends to make tenants want to stay for a longer rental term. According to statistics, tenants tend to stay longer in single family homes than multi-family units.

Then what is the benefit of a multi family property?

There are pros in multi family homes as well. With a multi-family home you are receiving multiple rents which means more money coming in as the owner. Higher return on investment is one of the main reason some investors prefer multi family homes. Although they look good on paper, they do have a higher tenant turnover. How do you mitigate that you might ask, what if you really want a multi- unit property? One tip is to find a property with higher square footage amount per unit. Why? Well, just like our single family, families that have more space and storage tend to stay longer. 

Another great resource is to talk with your property manager about the return on investment that you are hoping to produce.