Best kind of Rental Property

[Frank Scala]

Multi-Family Homes or Single Family Homes or Other?

I just wanted to get some opinions from fellow Bigger Pocket members who have had experience... What is your preferred type of rental property and what type of ROI are you yielding? Thanks!

[Gregory Rice]

Hi @Frank Scala ,

I recommend investing any type of multi-family. I don't suggest a single family. Here is why:

Say you get a bad tenant, and they decide to stop paying. Then you have to evict them, then the place is trashed, then you have to clean it up, then you have to bring it back to rent ready condition. Often times this will be a slide of over $10,000 before you can get a new tenant back inside (and hope they don't put you in the same situation). My methodology when it comes to investments is having as many revenue streams as possible in the event one of them dries up (Ie: a deadbeat tenant). This way your other revenue steams (other units in the building) can help offset costs you will incur from a bad tenant. The thing with a single family is that it is one very large revenue stream, but it is a risky one to bank on. I have had successful rentals of single families, but it is from investors who have purchased it outright and have no note on it.