Are you thinking about investing in multifamily or single-family properties, but you’re not sure which one is better for earning passive income? If so, you’ve come to the right place.
In this article, I’ll answer this question and provide you with tips that you can use for choosing the right investment property for your portfolio.
Multifamily Vs. Single-Family
It’s understandable that many investors would question if investing in a multi-family property is better than investing in a single-family property.
Today’s Real Estate Investors are heavily influenced by what they see in the media, and on television, where investors like Chip and Joanna Gaines are shown renovating, or flipping single-family properties but, the reality is that owning single-family properties come with a dark side.
When an investor owns a single-family property, the simple reality is that if the property is sitting vacant, that investor is going to be faced with having to cover their mortgage and other expenses for that property until they find a tenant.
Contrast this with the investor who owns a multi-family property; it doesn’t matter if that property is a duplex, triplex fourplex, or small apartment building, as long as one of those rental units are occupied, the investor can continue to earn passive income from that property until they can find another tenant for the unoccupied units of their property.
This is by far the biggest reason why multifamily properties will always be better, in my opinion, than single-family properties, especially when it comes to earning passive income.
When an investor owns a single-family property, they only have one door that they can earn income from, compared to an investor who owns a multi-family property that potentially has multiple doors that are producing income for them
Simple basic math always plays at the end of the day but, if you’re the type of person who likes to take the Hard Road when it comes to building your Investment Portfolio, then by all means I invite you to invest in single-family properties as much as you want.
If you’re an investor who wants to get an excellent return on investment (ROI), from your investment within the first year, then you should be focusing on investing in multifamily properties.
Aren’t Multifamily Properties Expensive To Invest In?
The biggest misconception that many investors have about investing in single-family vs. multi-family properties is that multifamily properties are more expensive to invest in than single-family homes.
The reality is that even though the multifamily properties may be expensive, especially in cities like San Francisco, Los Angeles, Miami, and other major cities, the truth is that investors can find affordable multi-family properties that often cost less than a typical single family home in California.
Thanks to the internet, and websites like Bigger Pockets, it’s possible for investors to be located anywhere across the United States, (or the world), and acquire multifamily properties, many times without having to leave their home or office.
Don’t let distance or location stop you from investing in multifamily properties because there’s never been greater demand for multi-family properties than right now.
In today’s world, most renters want to live in multifamily properties vs. single-family homes because the average multi-family property is often located closer to the city and offers more amenities than a typical single family home.
Greater Resale Opportunities With Multifamily Properties
Besides the fact that there’s an excellent demand for multifamily properties in today’s rental market, another reason to consider investing in duplexes, triplexes, fourplexes, and apartment buildings is that multifamily properties also offer greater resale properties than single-family properties.
This is especially true if you find a multi-family property that requires improvements, as long as you invest your time and money into improving the property, you’re going to have the ability to earn an excellent return on your investment in the future should you decide to sell your multifamily property.
Making improvements to a multifamily property is not complicated either, some improvements that you can make to a multi-family property include improving the kitchen, bathrooms and curb appeal. You can also add more revenue streams to the property like a laundry facility, vending machines, storage lockers and other amenities which may help you to increase the passive income that you’re earning from the property.
Higher Monthly Income
Back to the topic of passive income, it all boils down to simple economics if you own one single-family property and it’s sitting vacant, that property is 100% vacant, but if you own a duplex, and one of those rental units are vacant, that property is only 50% vacant, and still earning income.
Ultimately, your decision regarding if you should invest in a single-family or multi-family property is up to you but, the reality is that as an investor your goal should always be to learn as much consistent passive income that you possibly can.
Contact Trier Capital
At Trier Capital, we are a private equity firm that makes it easy for you to passively invest in lucrative apartment building syndications.
Our simple step-by-step process allows you to accelerate your wealth creation so you can live a magnificent life on your terms, whether that means traveling the world, spending more time with family and friends, or making an impact.
If you’re ready to invest in multifamily properties, but you don’t want to do all of the work yourself to the source, acquire and manage multifamily properties, I invite you to contact me at (630) 229-2383 or click here.