For many Central Florida real estate investors, the either / or between investing in single family or multi-family properties can be a challenge. One reason for this is because, like many other things in life, there can be pros and cons to both.
But going in with a full understanding of the advantages and the drawbacks can allow you to narrow down which option might be best for you, based on your specific goals and objectives. For instance, purchasing just one 4-unit building can oftentimes be easier than buying four separate single family residences. This is particularly true if you need a loan to finance the purchase(s).
The flow of rental income can also be a plus with multi-family properties. That’s because when one tenant moves out, you can still be collecting monthly income from the others. But, when a tenant in a single family property moves out, you’re left with a 100% vacancy.
Alternatively, when it comes to diversifying your investments, owning four single family parcels can oftentimes fare better than owning just one 4-unit property. In this case, if the value of property goes down in the area where your 4-unit investment is located, the overall value of your portfolio could drop significantly. But this wouldn’t necessarily be the case if only one of your single family properties’ value falls.
On the other side of the coin, multi-family properties can offer investors economies of scale, meaning that given the price per unit – particularly when it comes to managing the property – it can be much lower than with single family homes.
In either case – single family or multi-family – you will still have to allocate at least some time for maintaining the residences and managing the tenants. Depending on just how much time you have, it can often make sense to turn these duties over to an experienced property manager.
Without having to answer maintenance-related calls or advertise vacancies, you can focus on other things – like purchasing more investment properties! For more details on how an Orlando property management team can help you to achieve your goals, Contact Us today.
