When it comes to investing in property, you have a lot of different options. There’s a range of property types out there and finding the ideal one for you is key. Before you begin looking at properties, you need to consider whether you want a single family rental property or a multi family rental property. There are advantages that come with both, but there are also disadvantages. Take the time to think about which would be the better investment for you. Here are some of the main elements to think about when deciding between a single or multi family rental.

Think About Potential Rental Income

Though you can charge more for a single family property than you can for a multi family property, a multi family property will generate a higher rental income. This is because there are more units to rent out and more tenants paying rent, whereas there is only one rent payment with a single family property. There’s alway a risk of a single family property being unoccupied, as replacing tenants doesn’t always happen right away. This isn’t something to worry about with multi family rental properties, as it’s unlikely that all units will be vacant at the same time.

What Kind of Landlord Are You?

A single family property is generally a lot easier to manage than a multi family property, as there are fewer tenants to deal with and fewer potential repairs to organise. It’s important to think about the type of landlord you hope to be and whether you can accommodate the additional management that’s needed with a multi family property. With a multi family property, you will need to collect more rent and communicate with more tenants. Though it’s an additional cost you may not have expected, you can always enlist the help of an apartment rental management company.

Consider Your Finances

A lot of landlords need to secure financing to help them with purchasing an investment property, something that’s a lot easier to do with a single family property. A lot of mortgage companies shy away from those investing in multi family properties, especially if you don’t have a vast investment portfolio to back you up. There’s also the issue that a lot of traditional financing only applies to properties with fewer than four dwellings and many multi family properties have more than this. If there are more than four dwellings, you may require a commercial real estate loan and this can be complex.

Property Should Appreciate in Value

Before you buy any property, you should think about appreciation values. Most properties will appreciate in value over time, but some do so more than others. The current real estate market plays a big part in this, as does the condition of the property. If you want to boost the appreciation of the property you may need to carry out renovations and repairs, something that is much easier to do on single family properties. Multi family properties are likely to need more renovations and repairs to appreciate in value, which brings with it a higher cost.

Choosing a Property to Boost Your Investment Portfolio

When you are first getting started with investment properties, it’s important to think about your portfolio. A single family property is a good way to get to grips with the industry, and it’s often a simpler investment to make. As you gain more experience and a better investment portfolio, you can transition into multi family properties and larger investments.