Should You Invest in Single or Multifamily Units?
Real estate is the one thing that everyone thinks they understand, but in reality, it can be a complicated business. There are many different types of properties for you to consider investing your money into, and multifamily units may not be right for you.
When it comes down to deciding whether or not you should invest in single or multifamily units, there are some things that need to be considered before making this big decision. Read along to help you come up with the best conclusion.
Before choosing, why are you investing? Set your goals first
The number one thing you should do before investing in real estate is to make sure that your priorities and goals are clear. If not, then it’ll be difficult for anyone else to help guide the way when deciding between single-family homes or multi-family units.
In order not to invest a penny without knowing what you’re doing, it’s important that before any investments are made the inventory of properties needs to be known. Properties with good opportunities can then be chosen wisely so as not to waste time and money in vain pursuits.
Below are pointers to take to help you decide between single-family vs. multifamily investment.
Pros and Cons of Single-Family Investing
The pros
- Less turnover – a year or so may pass before your current tenant leaves.
- Single-family has high demand, you can sell it anytime if the ROI is not working for you or you just want to switch to a different investment.
- Single upkeep means less maintenance.
- It’s easier to finance a single-family home because it needs less money.
The cons
- Vacancy – running a few months without any payments means bad news for your mortgage.
- Unless you own several units, cash flow isn’t in your favor.
- Choosing the right location is difficult making it harder to scale.
Pros and Cons of Multifamily Family Investing
The pros
- Buying in bulk means lower costs per unit.
- Multiple properties mean better cash flow.
- Your property value will increase faster.
- Expand your portfolio faster.
The cons
- Multifamily properties are harder to sell.
- Multifamily properties are difficult to finance.
- Upkeep requires you to hire more people.
Investing in Single-Family or Multifamily Units – The Bottomline
As a landlord, knowing your market and what you’re comfortable with is crucial. Some people might think that real estate investing only involves the purchase of single or multifamily units to generate income.
Final Thoughts
At the end of the day, you don’t have to choose between two different things. If your bank account has enough room for it and you can afford both properties simultaneously that would certainly be an option as well! However, if you really want to be sure about making a sound decision, a smart investment, and ensuring a bright future ahead of you, contact a trusted decision partner who will ensure that your investment works best for your interest.
