SFH vs multifamily rentals- pros and cons
I know this has been discussed before, but I'm just looking for some experience-based weigh ins on this.
SFH PRO
one tenanant, longer term. Will tend to take care of the property better.
lease option
appreciation
SFH Con
vacancy= no cash flow
cash flows typically not as good as Multifam
Mult PRO
better cash flow
can still cover mortgage with vacancies.
maintenance is all under one roof for 4 tenants.
Multi CONS
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?
Most Popular Reply
I don't think there is more management required for MF in all cases. You mention utility costs, but you can find MF with separate meters, or have sub-meters installed and billed directly to the tenants. I manage my rentals and, when there is not a maintenance request or other specific reason to visit a property, I just do some drive by inspections and an occasional interior inspection of the property, in that respect it would be more management intensive to have a couple SFHs in different locations than a single MF building.