Investing in SFH vs MF in St. Petersburg and Tampa

[Calvin Pringles]

I wanted to share my thoughts on why I firmly believe that investing in single-family homes with an Accessory Dwelling Unit (ADU) offers a better investment opportunity in the thriving St. Petersburg and Tampa real estate market compared to buying small multifamily properties like duplexes.

#1 Better Location Selection:

Single-family homes with ADUs provide more flexibility in choosing prime locations within these markets. While duplexes may be limited to specific areas zoned for multifamily use, single-family homes with ADUs can be found in a wider range of neighborhoods, including more desirable, family-friendly, and high-appreciating areas.

#2 More Privacy for Tenants:

With single-family homes and ADUs, tenants get the advantage of more privacy and independence compared to multifamily properties where tenants share common spaces. This attracts higher quality, mid to long-term tenants who often take better care of their living space.

#3 Higher Rent Potential:

ADUs offer an additional income stream, allowing investors to charge higher rents overall. It will also allow househackers to get their foot in the door, in a higher priced market/higher interest rate climate.

#4 Higher Appreciation Potential:

Single-family homes tend to appreciate more consistently and at a higher rate than small multifamily properties over time. Additionally, ADUs can further boost the overall property's value, creating a positive impact on appreciation potential.

#5 Higher Resell-ability and Market Demand:

Single-family homes with ADUs cater to a diverse pool of potential buyers, including investors and owner-occupants. This increases resellability, as you're not limited to selling to just other investors like with small multifamily properties. A broader market demand can lead to faster sales and potentially higher profits when it's time to exit the investment.

#6 Lower Maintenance Costs:

In comparison to small multifamily properties, single-family homes with ADUs often have lower maintenance and repair costs. As mentioned, higher quality tenants will be a direct result of this. Additionally, if you decided to STR/MTR your ADU, you will have higher turnover (with larger profit margins), meaning you can keep a closer eye on your unit for maintenance and upkeep.

Please remember that every investment decision should be based on thorough research and understanding of your personal financial goals and risk tolerance. I hope this post provides insight on why I am bullish on investing in single-family homes with ADUs versus smaller multifamily.