I like sfh's more then apartments. Am i crazy?

[Joshua D.]

I like sfh's more then apartments. Am i crazy? Seems to me at least in my area its a better business model.

Example so i looked at i thought was a steal for a 5 unit for $60,000 but in a bad area. It would cashflow say $800. Where i can buy sfh's with 50k equity and cashflow between $200-$500.  Am i crazy or whats your argument to this? We also have 3 duplexes but 18 sfh's

[Joe Splitrock]

It is not as simple as saying one is better than the other. There are different advantages and disadvantages and different fits for different types of investors. It also depends on the market.

I also think the size of multifamily is a major factor. When you own duplex / twin homes, that is essentially the same as SFH. There is really no economy of scale when you buy the small multi. There is no question that scale has advantages, but you can also get scale in single family.

I would rather have one single family property renting for $1400 than a duplex with each side renting for $700. Yes the duplex has only one roof, but it has 2 stoves, 2 refrigerators, 2 air conditioners, 2 furnaces and most importantly two tenants! Why do I want twice as many tenants, twice as much vacancy, twice the people to collect rent from, etc! Tenants and vacancy are the hardest part of this business.

Of course larger apartment complex give you true scale. If you have 50 residents you can have on site management, maintenance and leasing. You can contract volume for appliance replacement or rehab and get a discount. 

As others mentioned, for a smaller landlord, SFH can be an advantage. You are not completing with large apartment owners. In my market companies put up buildings that sit half vacant for two years as they fill units. How can I compete against a brand new building with pool, walk in closets and move in promotions. I should say how can I compete for good tenants. My houses offer something multifamily does not offer. Privacy! You have a yard and you are not sharing walls. That is my niche and it works for me.