Hi, I currently own a home in WI and would like to pursue owning other properties here. I am nervous about starting in multi-family because of the size and no experience being a property manager/landlord. Looking for advice on if single family is good to start out on or if it is just better to own multi-family and just figure it out anything is helpful thanks!
It depends on the market you are in. I started out with a single family that I did a brrr on and also did a single family flip and both have went very well. Depending on the market it might make more sense to do single family or multi family
SFR investing is something where there are a lot of varying opinions for many different reasons. In a nut shell....SFR usually have less turnover and less maintenance burden on the landlord when occupied HOWEVER they typically provide smaller net income than a duplex and when they are vacant there is no-one paying for any expenses versus when one half of a duplex is empty you still have income. When purchasing there is also much more competition. I personally would find a SFR as very stressful first investment given the vacancy factor and a certainly right now during the ultra competitive market more stressful to get under contract. But as I said there are many opinions on this. I'm hoping someone will chime in from the other side of fence so you can hear that side as well.
Thank you this was very helpful. There is a lot to consider!
I feel right now where I live in Waukesha, WI the market is really hot like everywhere else. Thinking it might be easier to buy a personal property and rent out my current primary residence as my first rental since I know the house very well. I also can afford both mortgages so I believe from a vacany standpoint that may be a good option? Thoughts?
You just need a good Core team. I invest in multi-family in Columbus OH.
@Greyson R Wolf-Dixon , if you are able to afford the mortgage on vacancy easily without concern then I believe SFR would be a decent avenue for you to go. Tenant relations, maintenance, are usually less which would be good for a person starting out especially if you have a demanding job. I say go for it as long as the numbers make sense.
I like this strategy and my wife was on board but our market is on fire hot. So we are getting a vacation property instead. There’s always an angle to find a deal in any market. Sometimes it is harder. If you are considering a change in housing situation moving out of your current primary residence gives you a few options moving forward with your taxes as well. I’d talk to a CPA or tax pro on how you could plan for your future through minimizing your tax burden on properties you have lived in.
Didn’t quote. So to clarify. The strategy of buying another place that you move into and renting your previous residence out. You are familiar with both the house and the area. Would likely have an idea of the expected people who would want to rent in that area.
Thank you for your advice. This really helped and I have set up meetings with my tax accountant!
Ultimately what you find works best for you will be your best investment. If being a landlord is not in your wheelhouse, don't try to force yourself into that position. As mentioned, small MFH will tend to give you more wiggle room for cash flow, but that is subject to each market. If you went the SFH route, you could always look to use a rent by the room strategy, which might balance your cash flowing odds a bit more. I don't know for the area you are in, but sometimes small MFH just isn't as much of an option in terms of inventory, so that is something to consider as well.
Thank you for your help!
Everyone is different but starting out with a duplex was great for me! It needed sprucing up so I attacked one side and got it rent ready then advertised it. Once someone was renting mentally it became easier because I knew all my payments were going to be covered by that one side. Starting out with more than a duplex seems more intimidating to me but can be done but seems like a duplex is perfect size for one person without much experience