Single-Family Home or Apartment Building: The Better Investment?

Are you ready to invest in residential real estate? If you are, you should assess whether your investment should go into single-family homes or apartment buildings. Here are a few things you should consider:

Vacancy

Vacancy is a scary word for real estate investors, and more so for investors who buy single-family homes. It’s a black and white issue: either your property is rented or it is not. If your property goes three months vacant, then 25% of your annual revenue has disappeared.

However, you have less exposure to risk and loss if you own a multi-family apartment building. If you own a multi-family apartment building, the more apartments you have, the better. The risk is spread out.

Management

Maintenance for apartment buildings is obviously more expensive than what home investors pay, but because those costs are spread across a broader swath of properties, you’ll be paying less per unit.

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