Comparing single- and multi- family properties

door2When you decide to jump in and invest in real estate with the goal to rent it back out to a tenant, there are decisions that have to be made. You'll need to decide if you'll be investing locally or outside of your home town. Will you be hiring a property manager to handle it or will you be going at it on your own?



Then there's an equally important question: will you be investing in a single- or multip-family property?



There are many differences in the kind of property that you choose to invest in, and much of that decision will depend on just what you would like to handle as a landlord. While a multi-family property such as a duplex, quadraplex, or apartment building will likely bring in more money (due to multiple tenants in multiple units and often a greater pool of applicants to choose from), single-family renters may be more likely to stay longer, decreasing your turnover rate. Apartment renters tend to be more transient by nature than house-dwellers that might be looking to rent in a place with a good school and family activities nearby.



With multiple tenants in multiple units, if you don't hire a property management company and choose to take on the task yourself, it may seem never-ending. A single house may receive a call every now and then for a leaky faucet or something else that needs repairing, but if you add five, six, seven, or more units to that, you will obviously be adding to the workload.



While you may have a larger group to choose from that are looking to rent an apartment versus a house, if they are not planning to stay a while they may not take care of the property in the way someone who plans to live in your rental house for several years would. Each tenant will be a little different, but there is something to say for someone who plans to put down roots and stay a while, as long as they're a good tenant.



In the end, it will really depend on the kind of landlord you'd like to be and the amount of involvement you'd like to put into your investment. BiggerPockets has a great article here from a multi-family housing landlord to provide at least one side of the argument.




POSTED July 29 2014 10:18 AM
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