Investing in a single-family home vs. multi-family. Well let’s talk about one thing. The biggest difference right now is for a single family home, California rent control doesn’t apply. Multi-family, yes you’re limited to a cap on what you can raise the rents each year.
Aside from that, I’ve seen over 30 years in working with real estate investors that people have succeeded in both routes. Some people have owned a lot of single family homes. They can be a good investment. The tenants have got their fence, they’ve got their yard, their space. They take ownership to it, sometimes a tenant can stay there a long time. Sometimes we have the tenant pay the water bill, or all expenses for that matter.
Disadvantage, the return in a general way is a little bit less. Possibly once you compensate for the factors of longer term tenants, it can sort of counteract that.
Multi-family – the attractive thing there you can get more units. You could have 4 units, say, all in one space. So you’ve got one tax bill, one water bill, one insurance bill, and you can get a better return.
Those are the main differences. I think investors can succeed in both routes, just depending on their personality and how they view their own investment direction.
