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).
