Wait for a Duplex or go for SFH?

[Derek Meyer]

In my county (outside Tampa FL) there are 4 duplexes in my current price range ( < $350k). As they go onto the market they get under contract pretty quickly.

Now that I have my down payment secured I found a few Single Family homes I could snag and start renting, though I lean towards wanting a multi family property.

Should I put less attention on this or sit on my down payment and watch for a good deal to try to snag?

[Erik W.]

As I mentioned in a thread the other day re: the old adage that multi-family is always better than SFH, you have to weigh to Pros and Cons of both types. I have SFHs, duplexes and 4-plexes, but since 2007 I have mostly stuck with SFHs. In my market, they are easier to rent, have shorter vacancy period, rent for more $ per unit, have less drama to deal with (she's making too much noise....he's always parking in my spot!, etc) and SFHs also have higher resale value to owner occupants.

MF advantages show up when you start getting 4+ units on the same property with savings on insurance, taxes, and maintenance, etc.  For example, a 4-plex townhouse unit may have only be taxed at 2.5 times the rate of a group of 4 comparably sized SFHs, and if all 4 units share one roof that will cost $18,000 to replace vs. 4 SFHs would likely cost $25,000 or more.

The one argument I don't accept is that if you have duplex and one unit goes vacant that's better than owning houses because when a house goes vacant that is 100% of rent lost.  That's a false equivalency.  The obvious solution to this is you buy two houses rather than one duplex.  Then you have 2 units either way, and 1 unit vacant is 50% regardless of whether there is one duplex or two houses.

Pros and Cons to both.  Weight them and decide which ones you want to start with, and you can always diversify to the other class later.