Single family vs. multi family

[Casey Perkins]

I have always been drawn to real estate investing but have been focused on building my career. I am finally in a position to start investing and have debated back and forth on single family or multi family. Which is the better strategy?

[Jon Huber]

@Casey Perkins  It's a pretty broad question, so I apologize in advance. Here is the broad answer.

It depends, on so many things. 

It depends on your area you are investing in. For example, in many areas (like the one I live in) all of the single family homes are in nice areas, and the multfamilies are in not so nice areas. Also, the quality of tenants differ between the two. 

It depends on your financial situation. Generally, multis are at a higher price point that may price you out of the market. A triplex in the same neighborhood as a single will be significantly higher, given the homes are of comparable quality.

It depends on your available time. Managing multiple units as opposed to a single will most definitely require much more of your time. In fact, you may need to hire property management, which will then cut about 8-10% of your gross rents out of your bottom line.

It depends on your goals. Depending on if you'd like to flip houses or grow a buy & hold empire will determine which is better. Flipping, you'd want to focus on single family homes because you can attract the most buyers (families and investors... multis will most likely only attract ivnestors on the resale), whereas buy & hold for "economies of scale", you may want to focus on multis, given the other previous points still point to multis.

Lastly, it depends on you. What do you want? Whatever you want, go out and get it. You only live once and there is no time like the present.

Good luck out there.