Better to own a multifamily or a Airbnb house

Buying & Selling Real Estate
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Better to own a multifamily or a Airbnb house

Dovi Schwartz
Rental Property Investor · Brooklyn, NY · Member since 2020 · 30 posts · 5 votes

If someone has 10% to put down on a property for the same amount either a three Plex in Waterbury Connecticut (Not necessarily have tenants) The building is in OK condition

Or a house in Orlando Florida and Airbnb it

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  • Jeff CopelandBusiness Member
    Real Estate Broker · Tampa Bay/St Petersburg, FL · Member since 2015 · 1k+ posts · 2k+ votes
    6y

    I can't speak to the real estate market in Waterbury, CT, or even Orlando for that matter. 

    But here are some things to consider:

    • Long term rentals are generally more stable. Case in Point: Vacation rentals are currently banned statewide in Florida by the Governor as part of the pandemic response.
    • Short term rentals are much more management and labor intensive (you are turning units over 50+ times per year on a weekly rental, compared to once every 1-2 years on a long term rental). For this reason, the expenses are much higher on a STR.
    • Lenders will count rental income from long term leases are part of your overall DTI, because it's a contractual obligation. Short terms rentals, by comparison, are subject to market demand and cancellation.

    In a nutshell, short term rentals are higher-risk, higher reward, but can be feast or famine. While long term rentals are slow and steady by comparison. 

    So much of this decision comes down to your own personal goals, financial position, and level of risk tolerance.

    Copeland Morgan LLC4.770 Reviews
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  • Dovi Schwartz
    OP
    Rental Property Investor · Brooklyn, NY · Member since 2020 · 30 posts · 5 votes
    6y

    @Jeff Copeland

    I would like to start off small so from what you’re saying it seems that it is better to start off with a slow and steady income from my multi family then to go into the market of short term rentals correct

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  • Jeff CopelandBusiness Member
    Real Estate Broker · Tampa Bay/St Petersburg, FL · Member since 2015 · 1k+ posts · 2k+ votes
    6y

    @Dovi Schwartz - I have no idea what is best for you and your situation. Only you (and your financial advisors) can figure that out. I just provided some food for thought.

    Also, keep in mind you'll have a very hard time finding financing for an investment property with only 10% down. 25% is usually the minimum.

    Copeland Morgan LLC4.770 Reviews
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