Single-Family Unit or Multi-Family Unit: Which Should You Invest In?

While property of any type, whether single-family or multi-family, is a great investment, there are definite pros and cons of each. Here is a quick breakdown for those wishing to invest in real estate.

 

Single-Family Unit

What it is | A property that can only support one family, like a house or apartment.

Pros

  • Less capital outlay with a much smaller down payment
  • Greater resale opportunities
  • Higher demand
  • Lower tenant turnover

Cons

  • Less cash flow as you are only receiving one set of rent each month
  • Vacancies take a bigger hit on your wallet
  • It can pose a challenge to your investment portfolio if it is not performing as well as you would hope

 

 

Multi-Family Unit

What it is | A property with two or more units, like a home and a granny flat, or a small apartment block.

Pros

  • You can build a large investment portfolio for less; the economy of scale
  • More monthly cash flow as you are receiving multiple sets of rent each month
  • You can live on the same property as your tenants if you wish

Cons

  • Tenant screening for large-scale properties may result in the missing of some red flags
  • Possibility of more frequent turnover
  • Finding financing/bonds may be more difficult
  • Large capital outlay
  • Management of the property may be difficult and could result in the hiring of a property management company, thus adding additional costs

Now that you’ve got the knowledge, it’s time to find a rental property! Head to gumtree.co.za or your Gumtree app (click for Apple & Android).

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