Single family vs. multi family - Posted by Brad PA

Posted by Ronald * Starr on June 24, 2001 at 10:21:27:

Dan T------------------

Think about it any way you want. But, be prepared to check how anybody you are talking with defines it so you can understand each other.

Gee, your investment career would be ended because you know more now and have a more accurate representation of the world so you can work better in it? Maybe you need to change something there.

I always want to understand better what is going on. I appreciate CREONLINE.COM because there are very knowledgeable people here and I can learn more about real estate investing. It is hard to find people who really think about things as opposed to just parroting what they have heard.

Good Investing*********Ron Starr

Single family vs. multi family - Posted by Brad PA

Posted by Brad PA on June 22, 2001 at 21:13:12:

When buying rental property, what are the advantages and disadvantages of renting single family homes vs multi family dwellings. When I say multi family I’m referring to duplexes, triplexes – nothing huge.


Re: Single family vs. multi family - Posted by Ronald * Starr

Posted by Ronald * Starr on June 23, 2001 at 12:28:31:


In the world of real estate finance, all of the properties you are talking about are lumped into the category “Single family.” The loans for 1, 2, 3, and 4 unit properties are the same. Once you get above that the financing is quite different.

What you are referring to are called by many “Plexes.”

In my opinion there is little difference between these different investments, but maybe that is based on ignorance. I have one duplex and several single families.

In comparing single family and plexes vs the multiple-unit properties (5 or more units), I think a large part of it is individual choice. I prefer the single families and have only once tried to buy multiple unit properties (unsuccessfully). I have a good friend who had SFRs and moved on up to apartments. He has three complexes and does not want single families again.

I’m not convinced that there is a difference in appreciation rates between 1-unit, plexes, and multi-unit properties. I would doubt that there is. At least over a longer-term period such as 10 years or more. Over a few years there might be some difference for the different categories of property.

When you think of investing, think of CAT, the benefits of owning income properties. C is for Cash flow, A is for appreciation, T is for Tax benefits. If you are in a market like CA where there is huge appreication and, frequently, negative cash flow, I would suggest single family properties. If you are in a midwestern state where this is little appreciation, you might go for the cash flow: plexes and multi-unit properties.

Good Investing******Ron Starr

Re: Single family vs. multi family - Posted by DanT

Posted by DanT on June 23, 2001 at 05:37:21:

Everyone else that answered has been correct and quite analytical. Single families appreciate faster, are more liquid, and are easier to manage. Multis have cash flow. Most pro landlords have both. Multis to keep the cash flow up and singles for ease of management and liquidity. DanT

Re: Single family vs. multi family - Posted by Mike R

Posted by Mike R on June 22, 2001 at 23:25:52:

The way I see it the last post was close but confused on a few issues… sfh will have greater apperation in short term but will have worse effect on vacancy effect, meaning 1 renter =100% of mortgage verses 1 tenant = 50% of mortgage in a 2 fam. As far as sales goes maybe 3 % of buyers are shopping for 2 or 3 families vs. 98 % for single families. I own both and vote for the 2 families, thats time tested. When shopping for a 2 family home, you have nothing but time on your side, you are not in compition with the young couple that have " fallin in love with this house". I would rather sell my single fams first than give up my mules … the duplexes. just my thoughts. Any questions please drop me a line

Re: Single family vs. multi family - Posted by Rolfe Kurtyka

Posted by Rolfe Kurtyka on June 22, 2001 at 21:35:49:


Here’s a few thoughts.

SFH’S - Advantages;
Liquidity - many buyers.
Tenants seem to be more self sufficient.
Many more sfh’s on the market = opportunity.
Generally cheaper than multi’s, easier to buy.
Tenants can be responsible for mow and snow.

SFH’s - Disadvantages
More cash flow than multi’s.
Scattered site maintenance.
Seller’s market can drive up price = poor cash flow.

Multi’s - Advantages
More cash flow.
Concentrated site maintenance.

Multi’s - Disadvantages
More wear and tear.
Tenants more like apartment dwellers.
Fewer buyers, fewer sellers.

Generally, I’ll take a multi over a sfh, but I’ll buy a sfh when the opportunity arises AND the property will cash flow. In my market, duplexes(+) are fairly rare, while sfh’s are not.

A recent MLS search for all of St. Paul, MN, showed several hundred sfh’s for sale, while only nine (9) duplexes were listed, one triplex, and NO 4-plexes!

Good Luck! Rolfe

You know… - Posted by DanT

Posted by DanT on June 23, 2001 at 17:04:23:

I consider single family just that, and anything beyond that as a multi. That being said when I went and looked back on some figures over the last ten years, you were exactly right. The appreciation is about equal. I have had it locked in my head that single family always outperformed multis. Learn something new every day, thanks Ron. Now, hope the wife doesn’t find this admission of incorrectness or I will be through! DanT