Single Family Rental Property Pros
- Usually there are fewer expenses. Tenants tend to be responsible for yard maintenance and all utilities.
- Tenants tend to stay for a longer period in single family homes. Single family tenants tend to settle down more and usually have kids looking for a good school.
- Turnover will generally be reduced with a nice home and good tenant screening.
- A single family home can be sold at a retail price and allows an exit strategy for the property. Usually, the only person who is going to buy your multi-family property is another investor.
- Your potential buyer base is much broader with a single family home. There are more people out there who can and will buy a single-family home opposed to a multi-family. Making it an easier exit if needed.
- You may not be expected to furnish the property with appliances. Many single family tenants have their own appliances.
- Lower property taxes. Generally, non-owner occupied multi-family residential properties are assessed at a higher rate for property tax purposes.
Single Family Rental Property Cons
- When tenants move out your vacancy rate is at 100%. When a single family home is vacant there is no steady income. This lack of cash flow can hurt financially if the unit is not filled quickly.
- When vacant, theft and other vandalism can be more of a problem because there is no one there to keep an eye out for your property.
- With single family homes as your rental properties, everything you have that can break multiplies. You have more roofs that can leak, more air conditioners that can go out, etc.
- There is more upkeep. There are more fences to repair, eaves and dormers to paint, etc.
- Sometimes management can be more difficult as your properties are more spread out and not all under one roof.
