Pros & Cons: Single family & Multi family
Hi you guys, I am trying to organize thoughts around single family vs. multi family. I’d like to be confident and knowledgeable enough to articulate the rationale for either niche.
This is my work-in-progress list. There are some assumptions in here that vary, but I tried to capture what it might be ‘on average.’ I’d love to get your perspective and build on this.
Single family
Pros
- available at every price point
- easy to understand
- comps are relatively easy to determine
- numerous exit strategies available
- less complex to rehab
- less complex to BRRRR
- better likelihood of natural appreciation
- Less turnover
- Fewer tenant headaches
- Tenants pick up most/all of property expenses (also, no common areas)
- Tenant more involved in upkeep
- More financing options
Cons
- a lot of competition (regular buyers, other investors)
- inherently slower to scale than multi family
Multi family
Pros
- scale up is built in
- more cash flow vs amount invested? compared to single family?
- More units over which to spread costs
- Bigger deals in which investors can be brought in
Cons
- fewer available exit strategies
- harder to rehab assuming occupancy
- less natural appreciation (investors always want a deal)
- owner more likely to pay some utilities
- higher percentage of vacancy / more turnover
- generally lower caliber of occupant than single family (more hassle)