Are you a real estate investor who is planning on buying a new rental property? If so, you may be debating buying a multifamily rental property vs. a single-family rental property.
In this article I’ll break down multifamily vs. single family rental properties and provide you with the pros and cons of either option.
Why Purchase A Multifamily Rental Property?
Pros – The obvious benefit of purchasing a multifamily rental property is the fact that with a duplex or apartment building more doors equals more income.
Imagine being able to collect three or more rents every month from one property instead of collecting just one rent. You can do this with a multifamily rental property, just make sure you buy a property that’s in a great location, near shops/stores/restaurants, close to public transportation and in a good school district because these are the things that people look for in a rental property.
Cons – As with anything in life when you purchase a multifamily property there’s going to be several cons including the fact that you have more appliances to repair when they go out like water heaters. There’s also the possibility that a multifamily real estate may be more difficult for you to finance and your lender could require you to put down 30% compared to a lower down payment for a traditional single-family home.
Should You Purchase A Single-Family Rental Property?
Pros – Depending on your area, you may be able to purchase single family homes below market value and get them rented quickly compared to what it may take to purchase a multifamily rental property and get it ready for rent.
Besides being able to purchase single family homes below their market value, single family homes may be easier for you to finance and manage when compared to multifamily rental properties
Cons – There are a few “cons” to consider when purchasing multifamily rental property including the fact that with one rental it may be more difficult to get it rented compared to what you would face when owning a multifamily rental property.
Aside from some potential difficulty that you could face with renting your single-family home, both properties present similar challenges when it comes to managing them yourself. This is why if you are committed to running your real estate investments as a business you shouldn’t hesitate to hire a qualified property management company to professionally manage your rental properties for you.
With a property management company working for you, you can expect every aspect of property management to be covered including: rent collection, maintenance, customer service and more!
To get started with hiring a property manager, contact a local property management company in your area to learn more about the services they can offer you.
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