Is Single Family or Multi-Family the Better Real Estate Investment?
Owning residential rental property can be a great way to generate a steady stream of passive income, along with building up equity while the balance of your mortgage is paid down using “other people’s money” (OPM).
There are several property types available in this arena, though, and for many years a debate has ensued as to whether single-family or multi-family properties are the better way to go as an investor.
As a newer real estate investor – or if you are still considering real estate as a source of income for yourself – it is particularly important to know the pros and cons of each of these so that you can make the best property purchasing decisions going forward.
In many cases, residential property owners will start out with single family homes – oftentimes because the house was initially their primary residence, and rather than selling it, the individual(s) opted to instead use it as an investment.
Although single family homes can require some work – such as property and yard maintenance – they can also be easier to manage because there is only one tenant (or one tenant family/group) residing there.
These properties may also offer more enticing amenities, such as laundry equipment, off-street parking or garage space, and a private yard. So, rent that is charged for single family homes can oftentimes be higher – and in turn, may attract a higher-quality tenant.
On the other hand, while multi-family properties can be a bit more intricate to manage, they also may provide investors with a higher return on investment. This is due to “economies of scale,” or more people paying rent from a single location.
In either instance, though, it is still necessary to find and screen good tenants, ensure that rent is collected in a timely manner, and respond to both emergencies and day-to-day property maintenance needs.
If you are a residential real estate investor in Central Florida, and you would like to delegate these types of tasks, bringing a local, experienced property management team on board could make sense.
So, give us a call if you would like to learn more about how our process works, and how it could work for you!