Originally posted by Chris F.:
I know this has been discussed before, but I'm just looking for some experience-based weigh ins on this.
one tenanant, longer term. Will tend to take care of the property better.
vacancy= no cash flow
cash flows typically not as good as Multifam
better cash flow
can still cover mortgage with vacancies.
maintenance is all under one roof for 4 tenants.
shorter term tenant(apt vs "home")
appreciation may not be as good
smaller target audience for selling (investor-only sales)
I'm debating this. My strategy is going to be long term B&H..(retirement) so not as concerned with appreciation play. Also I'm looking to build a portfolio up over the next few years, so I'm looking at the best ROI. from what I can see, multifam, even accounting for vacancy (excluding exit-aka selling) would be the best play.
Thoughts on this?
So look at your last paragraph... you're long term B&H for retirement, not worried about appreciation. Given that you mentioned retirement, I'm going to expand upon that and assume you're looking to fund your retirement through passive cash flow, i.e. you don't need to sell.
When you take those two things into account, you remove a PRO from Single Families (appreciation) and a CONs from Multi Families (selling audience & appreciation).
You're basically left with the assumption that a tenant will take better care of and stay longer in a house versus the assumption of a bit more management intensive, with higher turnover, and the reality of higher cash flow in a multi family.
Seems like a no brainer to me.
I would like to see some data on 2 and 3 bedroom multi families versus single families in terms of how long people stay. Just seems intuitive to me that most of the families in my multi bedroom units aren't dreaming of owning a house, they will stay for years if I treat them right... where as most house renters some day will want to own that house. 1 bedroom apartments would be a different beast I'm guessing.