Should You Buy A Single Family or Multi-Family Investment Property

Should You Buy a Single Family or Multifamily Investment Property?

According to Billionaire Andrew Carnegie, 90% of millionaires got their wealth by investing in real estate. However, when looking to purchase an investment property, there are several factors for you to consider. One of the biggest is whether you want to own a property for a single-family, or a building that can cater to multiple families. There is a lot of debate in the investment community about the pros and cons of both of these situations. To give you some clarity about this issue, I wanted to talk you through some of the reasons why I prefer to own single-family homes. However, you should keep in mind that this is just one perspective. Some people might prefer to own a multifamily investment property.

My Experience

I wanted to start this article by talking about my experience with owning investment properties. I have owned both of these types of properties, which has given me a unique view on this situation. Based on my experience, I would choose to own single-family properties as opposed to multifamily investment property. There are several reasons behind this decision—let’s look at some of them.

Ease of Management

One of the most significant benefits of owning a single-family property is how easy they are to manage. Even though I work full-time as a real estate investor and manager, I still struggled to keep up with the demands of a multifamily property. Often, these properties tend to drive more disputes than single-family homes. There are several reasons for this. First, multiple tenants tend to share the same wall. As such, it means that you will need to work through more disputes. For example, someone might be making too much noise or be cooking smelly foods. Besides, the parking spaces on these properties tend to be limited, which can also create disputes when tenants try to have a party. If they invite their friends and family over, they might park in other tenants’ space. Because of this parking issue, you may become involved in more disputes that you care to sort out. The problem I had was that I kept getting complaints, which I would be responsible for straightening out. I felt like I was made to be a nanny for everyone on the property.

You will also need to think about how many repairs you will be required to perform. With multifamily homes, you can get more tenants. However, this means that you will need to perform more repairs each year. The amount of maintenance can quickly become a significant expense.

Owning a single-family property takes away most of these problems. With just one unit per property, you see fewer neighbor disputes about which you need to worry. Besides, it’s easier to build a strong relationship when you can focus on one family/resident at once. Because you don’t have to spend as much time sorting out disputes, you are free to spend more time focusing on your portfolio. Concentrating on your portfolio will ensure that you will be able to make the wisest investments.

Single-Family Homes Have Lower Turnover

Another critical factor to consider when choosing a property type is how much turnover you will receive. When one tenant leaves, it can be expensive. If the property is vacant, you won’t be able to collect rent. Besides, you will need to advertise to attract more people to the property. There are a few factors that affect the turnover rate. However, one of the biggest might be the size of the property. Multifamily homes tend to have limited space compared to single-family homes. If a family has more room than the more items they bring, and the more difficult it will be for them to move out.

Conclusion

When you start to invest in the property market, one of the most critical choices that you will face is whether you want to own a single-family or a multifamily home. I discussed some of the reasons why I preferred to invest in single-family homes. To give you a different perspective, you might want to consider the points made in this article from Mashvisor. If you have any questions, feel free to give me a call or send me an email.