For me, single-family homes are my bread and butter! I do own a few duplexes, but there’s something about single-family homes that works for our business. I don’t have to deal with some of the issues that accompany hosting multiple tenants on the same property. There are bound to be issues when you have many people living in one space. In single-family homes, you don’t have your tenants complaining about each other.
I also find that my single-family tenants love their rentals; they treat my properties like their own homes. It just feels good to come home to an actual house with a driveway and a yard. Their children have their own bedrooms; their pets can play in the fenced-in yard. They view the property as their home, and I love that. Not only do the tenants take care of the house, but they also tend to stay a long time! It’s not uncommon for me to sign a multi-year lease on a single-family home.
As for multi-family homes, it does appear on paper to have higher ROI than single-family. However, multi-family properties tend to have a higher tenant turnover rate. Like I mentioned, the tenants simply don’t get attached like they would to a single-family home. It’s just not as comfortable and homey!
However, if you’re set on multi-family investments, there are a few ways to mitigate that tenant turnover. Make sure you find a larger duplex with a higher square footage. You want your tenants to stay put, as tenant turnover can be one of your highest expenses.Another thing to consider is qualifying your unit for Section 8 housing. That qualification can convince your tenant to stay longer, just because it can be difficult and time-consuming to find Section 8 housing.
Regardless of what you decide, it’s important that your rental property is a great home for your tenants. For me, real estate investing is not only about ROI, but also providing safe homes for my tenants and revitalizing neighborhoods.