One question I get asked a lot is, “Is it better to invest in single family rentals or multi-family properties?”
The truth is that there’s no perfect answer and so that's why you should invest in both, but for different reasons.
Here are some Pros and Cons:
Single Family Residences or (SFRs)
Usually it’s easier to purchase a single family vs an apartment building because less capital is needed initially.
Good for slow steady growth
You could possibly buy one a year and in 10-15 years, have an amazing cash-flowing portfolio.
Liquid in pieces
If needed, you could sell off a single home for the cash and not lose your entire portfolio.
Easier to diversify
If you want to diversify, you can buy SFRs in different parts of the country, with different market characteristics.
Slower ability to scale
With multi-family properties you can buy a good number of units under one roof at once. With SFRs, it’s one house at a time.
Liquidity in full
It’s harder to sell all your assets quickly if needed. You’d have to either sell one by one, or as a portfolio which is harder to unload.