There are many differences between Multi-Family and Single Family real estate investments. From their valuations to their financing. Below are some unique aspects to each.
Mulit-Family (2 or more units)
- rental income more stable because it is not dependent on one person
- can count 75% of the gross rental income toward your income requirements for financing
- more heavily valued on the number of doors vs lot and home size
- commercial financing required for 5 or more doors
- tenant drama - no we can't all get along
Single Family Home
- often cheaper to buy
- more rent per unit
- tenants are more likely to do landscaping and small maintenance
- larger market for resale
- easier to get long-term tenants
- vacancy can cost a lot when dependent on only one source of rental income (1 tenant)
Not all rental properties are created equal. No matter how you decided to invest you are bound to have challenges. Each property is different. I think single family homes are a bargin right now and a better place to invest. However, I'll take any good deal I can get.
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