Is Bigger Better When It Comes to Rental Property?
Multifamily vs. Single Family Real Estate Investing
by Dave Peniuk
 Many of our readers, and yours truly, are constantly asking which is the
better buy for an investor: single family homes (aka SFH) or multi-family
homes (aka MFH)? Well, I am writing this to FINALLY put an end to the debate!
For the purposes of this article, we'll consider either investment (SFH or MFH) to be a standard long-term buy and
hold rental property (that means, not a reno, not a flip, not a Lease to Own, not wholesaling, short-selling,
day-trading or any other real estate strategy out there!).
Now typically this discussion will take you down the road of buying Apartment Buildings versus Single Family Homes
... but I am going to do this a little differently today. Sticking with where my experience has been which is in
owning rental property varying in size from one unit to six units.
So for this article, a SFH is defined as a property (can be a detached house, condo, townhouse,
rowhouse, etc.) that has only 1 unit and thus only 1 family living in it. A MFH, for the purposes of this
article, is defined as any property that has more than 1 unit/family living in it. Thus, it could be a
house with a basement suite (2 units), a duplex (2 units), a triplex (3 units), etc.
Advantages of Investing in Single Family Homes
- Depending on the city/area, typically appreciate faster than MFH
- Generally a broader range of potential buyers (when it's time to sell)
- Often worth more on a per unit basis (but this can be a disadvantage too as you pay more for it)
- More liquid - SFH Can often sell quicker, even in a down market again due to a broader range of potential
buyers
- Only have to "deal" with 1 tenant, not many
- Tenants don't argue with other tenants because they are the only ones living there! There will be no issues
around which tenant gets to use the bbq or front patio or even who puts out the garbage
- Easier to get the tenants to pay for all of the utility bills again because they are the only ones using
them
- Some argue that you get a better "quality" of tenant in a SFH than in a multi-family, however, I do not
necessarily agree with this. Will discuss why later.
- Financing your investment property is often simpler
and easier to get.
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