There are a variety of opinions on this and several past discussion strings on this topic. I have 3 MFH's and one duplex. I like MFH's because of the following:

1) Here in eastern PA, MF apartments are at a rent price point where more people can afford them. That means more potential renters. SFH rents in my area are at least 40% to 50% more than apartment rent. A two bedroom apartment will run you about $ 800 whereas a 3/1 SFH is $ 1200.

2) I think you can manage them more efficiently as you simply go to one place to deal with all units. That means one roof to replace, one plumbing system to deal with, one place to go for showings and etc.

3) You can force equity by raising the NOI. This means greater potential returns versus SFH. To me that's the single greatest difference and benefit of owning MFH above 5 units.

4) The smaller the unit, the easier it is to turnover. There's simply less physically to mess up. I find the idea of rehabbing an entire SFH after a tenant trashed it daunting.

There's no one way though. There are many people here who are quite successful with SFH. I did MFH so I could scale quickly having come late to the game.

Why own multis? One goes vacant, you have 3 others paying the bills. House goes vacant, 100% loss. Most houses take a 30 yr mortgage and struggle to cash flow at times. It's normal for a multi to pay itself off in 15 yes or less. Better % return.

Single family homes makes an investor equity while apartments is more geared towards making income.

Example: A home purchased 30 years ago now produces a monthly gross income of $2,400.

A five unit purchased around the same period now brings in a gross monthly rents of $6,000.

If your house tenant moves, you have no income while vacant. I f one tenant in a 5 units moves, the income goes down 20%.

I do not think the vacancy issue with quads vs multis that many cite is not a valid way to look at multi vs. SFH.

Break your numbers down by the per unit cost. Let's say investor A purchases a quad for $30K unit ($120K total) and investor B purchases a SFH for $30K. All units livable "as is". If either investor has a single vacancy in any of the quads or the SFH, there's a $30K unit cost that has no rent coming in to cover it: period.

Think of it like this: what if instead of buying one quad for $30K per unit, investor B bought 4 SFH's for $30K per unit? Investor A and B both have the same $ invested and are both suffering the loss of one unit's rent. There is no difference just because A owns a quad.

Vacancy is vacancy. Per unit cost gives a more accurate picture of what's really going on.

Now if you can purchase that quad for $20K-$25K per unit and still get the same rents as 4 SFHs, then great job!

The advantages I see with multi-fams are you usually have lower cost per unit for things like roofing, taxes, and insurance. For example, a quad I own costs me $1300 / year taxes and $1200 insurance. My average SFH costs $400 for taxes and $350-$425 insurance. When I reroofed the quad it cost $10,000. If I reroof a SFH, it's $4000.

So again the per unit cost is a better metric, I think.

On the other hand, I find a better quality and longer-staying tenant in my SFH's. They don't have to put up with the noise from next door/upstairs/downstairs. Plus there's a yard for the kids and pets. I can usually get better rent from a SFH, which helps offset the higher cost per unit. SFH mows their own yard too, whereas I have to hire someone to mow the multi.

A disadvantage of multis is your only exit strategy is to sell to another investor. There are a FEW owners who will live in one unit and rent out the rest. Investors are cheap and will low ball. With SFH, you can sell retail to an owner occupant with little trouble.

I have a larger apartment complex in a HOT area of the city. I noticed that developers were building newer buildings on my block with lots of perks. Those buildings had a pool, guest parking spots, storage lockers, roof sun deck, mail room, central air conditioning, appliances, hardwood flooring and so on.

All of my tenants were interested in moving there once the building opened up. All of the landlords with older building on my block got scared. I didn't even bat an eye knowing that I offered a excellent product for a reasonable price.

I had all of my tenants on a 1 and 2 year lease. If my tenants signed a 2 year lease, they could avoid a rent increase. Since my building was under "rent control" my rents were priced under the market.

I explained to my tenants that the new building had a low move in special, but after six months they could raise the rent to market. My tenants said, "SO WHAT! We went all of those extras"!

I explained to my tenants they were paying around $2800 a month and could only be raised 3% a year. The new buildings starting rent was $3,250 for the first six months, then they could raise to market -- like $4,000 a month for this newer product.

Down side stuff to multis.

Landlord is respondible for snow and ice removal. My sfh do their own.

Tenants squabble like children about noise, pets, parking. They want the landlord to referee. That is an annoyance to deal with.

Multis are always in tenant neighborhoods. I buy my rental houses in owner occupied neighborhoods which protects property values and saves the annoyance of dealing with other landlord's problem tenants.

Sid has a good point on the cost per unit aspect. That is why multis always cash flow better.

This sounds funny, but I'm actually glad that multi have shorter tenancy and more turnover. Why? Tenant lives there three years, quick clean, re-rent at market rate. Two years later, moves out. Paint and flooring, re-rent again for higher rent. Repeat. A sfh... Tenant last 10 years, complete rehab, major expenses to bring back up to good condition. All the while, no income from another unit.

I've not had a situation where there's been a lot of squabbling to be honest. Even in the rooming house, there's not been a lot of this. Sure it pops up every now and then, but that's an exception to the rule.

6X6

Two other advantages of multis:

1) I have access to the common areas of my multi-unit buildings (basements, laundry areas, boiler and utility rooms, hallways, grounds) without having to give notice to the tenants. As a result, I can easily keep my thumb on the pulse of the building and the tenants' behavior.

2) Since I either pay for or personally maintain the grounds (grass cutting, snow removal, landscaping), I know these jobs are regularly maintained to a high standard. Having tenants responsible for these tasks is somewhat hit or miss. Exp: Many tenants do not have the same interest in weekly grass cutting and trimming if they are the ones doing it.

One other thing to consider when evaluating multi-units - my easiest building to maintain and manage is the four side-by-side townhouses. When tenants are not living on top or below each other, fewer problems occur.

One last issue. Financing a MFH is generally easier as well. Getting one loan covering several units is more efficient than getting several loans for separate SFH's.

"A rooming house is the most difficult to manage as you are dealing with the lower end of people who are mostly on social assistance along with may alcohol or drug problems."

I keep getting drawn towards MFH when the time comes to expand somewhere in a more urban market than where I currently live, maybe in the next five years. It would make more sense to go for a multi-- it's more efficient, having everything under one roof, or at least on one property.

However, the two things that concern me now, and which I'll have to come to grips with-- #1, mfh's in urban areas are susceptible to regulation that sfh's aren't. You need to live, or have a manager, within x distance of the property. You need to take a class about recognizing crime and knowing how to deal with criminals. You need to do this. You need to do that. You need occupancy permits, or filing fees, or whatever, to give the local bureaucrats their share. etc, etc, etc. I'm so used to operating in the Wild West-- I'm not used to taking bureaucrats into account.

SFR require less effort.

-Less turnover, tenants stay longer, so wear and tear (a lot of damage is done on move in & move out)

-Less grounds maintenance. Less snow shoveling. (All done by the tenant)

-Easier to get financing, lower cost entry point (smaller down payment)

Multi’s have their advantages too, it’s just about what you can finance and what will cash flow. The numbers are the best guide, along with a decent quality location

Also with SFR’s I would try to avoid HOA’s and most condos due to more layers of bureaucracy.

Good luck!.