What is the best investment? Single Family vs. Multifamily Rental Properties

If you’ve been a homeowner, or even rented a house or condominium unit to live in, it’s no sweat learning how to buy and rent out few. But perfecting your real estate management skills, controlling operating expenses and constantly squeezing out profits is much more difficult for the neophyte. Lets weigh out the options:

Single Family House (SFH) Rentals

Pros:

They can yield higher cash flow.

They are more affordable.

Cons:

They’re difficult to scale quickly.

They are more difficult to sell.

Multi Family Properties

Pros:

They’re easier and cheaper to manage.

You have more control over value.

Cons:

They’re more expensive to buy.

Emotional homeowners are likely to quickly sell at lower prices for non-economic reasons such as divorce, job transfers or a growing family needing more space. By comparison, investors want to sell for economic reasons and try to time their exit during market highs for the most profit. But competing by with emotional homeowners, you are more likely to pay too much when you buy and sell too low. Continue reading

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