First investment property - Single family vs. Multi family

[Tyler Brown]

I've been researching purchasing my first rental property in some low property values/low tax blue collar areas for a while now.  

One of the main things I'm trying to decide is if I should go for a SFH, or a 2-4 unit duplex/triplex/quad. I'm looking to maximize monthly cashflow, rather than counting on any appreciation.

My price point is in the $50k-$100k range.  There is no shortage of houses, both single and multi family, for this price, in need of minimal work, in the areas I'm looking at.  I'll be using a property management company, as well.

Off the top of my head, the most obvious reason to choose multi is the greater rental income. While a SFH may rent for, say, $1,000, each side of a duplex may go for $700. An extra $400 a month is nothing to scoff at.

Also with a multi, if one of your tenants move out, you've only lost half of your income, as opposed to all of it.

That being said, a SFH seems like it would potentially attract a little higher quality tenants. Also, I imagine that there is less turnover in tenants with a SFH vs. a duplex.

Also, with a SFH, the tenants are responsible for all of the utilities, while some MFHs have separate utilities, but many do not.

I'd like to any of your thoughts about a SFH vs MFH for a first time buyer, and if there's any big pro or con that I've overlooked, thanks!

[James Klafehn]

It sounds like you have the basics figured out and are on the right track.

Personally, I only go with multi family houses. That is what is normal in my area though. I have looked at investing in other states and in some cities people only want to live in single family houses and 3-4 unit houses are harder to find, they are almost taboo. 

As long as there are people in your market willing to stay in 3-4 unit houses, that's they way I would suggest. 3-4 streams of income and 1 roof, 1 foundation, 1 yard. As long as the house is nice and not in a rough area you will find good tenants. Filling the apartments with high end amenities like stainless appliances, wood flooring and quartz countertops will set you apart from the competition and will also get you the best tenants.