Multi Family vs Duplex vs Single Family
Seeking landlord opinions on multi family vs single family vs duplexes - pros & cons.
Seeking landlord opinions on multi family vs single family vs duplexes - pros & cons.
Hi Midnight,
I think it depends on how long you plan to hold on to the property. We have a duplex that always covers mortgage payments even if one of our houses is empty. But since purchasing the properties, we moved back to our home state. Now trying to sell: the houses will go faster, because more people want to buy the property they live in, but the duplex will probably only be sold to another investor. Before you decide, add the property manager fee into the equation. Now I think maybe for long-term duplexes maybe best (for us) because before one side covers expenses, and the other side is positive cash flow. Keep in mind this is now 2 properties that need upkeep on appliances, lawn care, etc. A starting point for us was deciding who we wanted to rent to. Usually families prefer sfh, and will be there longer. (I'm from a rural community.) Just my opinion. Hope this helps.
~Czjaba~
Thanks for your repla cza!
I've weighted this heavily and now have a strong bias towards multifamily. Here's why.
-Higher Cap rates
-Economies of Scale
-More worthwile to get property managers for 20 units than for 2.
-Better interest rates (when comparing 100% financed NOO properties)
-Easier to get into (they look at the property FIRST and then you, where as residential they look at you and then tell you how much you can buy)
-Less room to error. If you buy 10 duplexes instead of 1 20 plex, you'll put in less time per deal, and have more room to make a mistake.
-Appreciation: I'd rather get 3% per year of a million than of 100K.
I don't think multi's are for everyone, but if you feel comfortable with it, I think it's the best way.
I have other posts on this topic. I don't have time to find them, but do a search for my posts and you'll find some more of my thoughts.
Thanks for the reply hibby...
Currently we have inherited 5 single families & have 1 duplex we had purchased ourselves. The duplex is my best money maker so now we are considering a 4 plex. I'm not quite ready to jump larger at this point. The single familes are great as far as being rented long term. The 1 bedroom in the duplex basically turns over about each year or two. The rest are all basically stable.
The plan was at least to get all duplexes, but now that the 4plex has come up, I'm considering that it may be a great opportunity too. There are 2 lovely 4 plexes up - asking 279000 rents approximately 650 (some higher). They are both about 9 year old units.
The only thing about the market is that wih 4 families I see alot more for rent signs. I'm guessing it will be yearly turnover? Was hoping I could extend that by getting really nicer higher end buildings/units.
Great to hear your feedback on this.
Because single family residences are easier to sell, I'm just wondering if anyone has ever thought about or actually converted a duplex into one large home? Would there be any problems with city zoning?
One of the other things to think about is financing. How do you plan to purchase the property?
[addsig]
Converting a duplex to a SF usually requires rezoning. Best bet is to check with the city zoning commision. I have never done it, but know some people that have.
Hello Midnightgirl,
I own a single family home, two duplexes, two fourplexes and in process of purchasing another fourplex. The only thing about the fourplexes that I dislike is cutting the grass. The cost of grass cutting cuts into my profits. The second thing is leaks. Any leaks in the top two units will greatly affect the bottow units. Lastly you want to make sure that three of the units rented will pay for the forth unit. You will need that extra money even when all four units are rented in order to pay for maintenance and general up keep.
But fourplexes must be OK or I would not be purchasing another.
Out here in Jersey, with mutlifailmy homes, you have more rules and regulations to follow than if you just had a duplex or 3 family with OO. But then again NJ isnt the most landlord friendly state. Check the Landlord Tennat laws of your state too.
Good Luck.
[addsig]