Single Family Rental Homes vs Multi-Family Investing in 2022
Single Family Rental Homes vs Multi-Family Investing in 2022
Abstract
Economies of Scale With Multi-Family Properties The second benefit of the multi-family property has to do with economics, which economists or professional investors refer to as economies of scale. Again, a multifamily property is considered a business in the eyes of a lender, whereas a single-family home, even though it may be a rental property and you are truly getting a non-owner occupied loan for that property as if it was a rental property, which is, and will be the lender still looks at the larger multifamily property as a business. You can still call that a multi-family property, less likely to be able to do that with a large multi-family property, especially if you're just getting started because you just don't have the experience. So that's simple math, a hundred thousand dollars property, but when you compare that to a multiunit property or multi-family property, let's say there are 20 units, and those are a hundred thousand dollars each. Advantages of Buying Single-Family Rental Properties Buying single family rental properties has a lot of advantages such as forced savings for retirement, tax benefits, increase in wealth, stable income, and long-term capital gains. These collective management groups have different names depending on the location of the property and are sometimes called Property Owners' Association or the ominous-sounding Horizontal Property Regime. Long-Term Capital Gains Single-family rental property investors purchase properties to rent them out, with the expectation that the property value will increase in the long term.