I keep going back and forth. Single-family homes are straightforward. I get one tenant, manageable maintenance, easy to understand cash flow. On the other, an apartment could teach me how to handle multiple tenants, boost cash flow, and scale faster. For a beginner, what's better?
A duplex will safe guard you on the money flow front.
The secret to buying rental prop is to buy low during a market downturn and with tenants in place. Then, thru attrition, you can renovate each apt. To be competitive in the rental market you need to regularly make upgrades. You will learn in the first few years which upgrades are cost effective. You need to regularly check Zillow to see what similar apts are renting for, looking at all the photos. Of course you have to choose an area that is desirable, or growing and where tenants have easy access to their jobs. You need to do a whole lot of research. Driving around neighborhoods at all hours, walking around properties, reading about rentals, getting leases ready, etc.
Just saying that there's a hell of a lot more to rental property than just receiving a monthly check. You'll need to read all the laws and regs re rental property and tenant rights in your state. You'll need a decent slush fund for when appliances need to be replaced, or when a water heater drenches the living-room carpet, or when the air conditioning isn't working in 90° heat. Hint: your tenants won't be waiting weeks for you to buy them a new fridge.
You will devote more time towards your rental(s) than you now imagine. You will learn how to deduct repairs on your taxes, how to depreciate roofs, appliances, siding, etc. If you're not prepared to do all this, don't become a landlord. Invest in stocks instead.
Amen to that. I had three rental houses from 1978 to 1998 and wish to hell that I had done something different.
Can you expound?
Good tenants, bad tenants, down time between tenants, repairs, etc. If I'd known at the beginning what was in store for me I would have invested in Microsoft in the late 70s.
About the only good thing after 20 years was selling the houses and using the equity to buy myself a home for cash.
It's a lot of work if you do it right. And with today's tenant friendly laws you are forced to do it right.
Depends in the area youre buying in and what the rent and demands are for dwellings.
The property close to markets, parks, mass transit, schools.
But also something close enough for you to drive by daily, clean up on wkends and for those late night emergencies- broken heater, smell burning, or gas.
Do your research.
(Purchased a 3 family, lived in one unit, rented the 2.
The advantage was we did all the maintenance -shoveling snow, cleaning the garbage, sweeping and keeping the street clean and vacuuming, and small repairs- loose screws, light bulb changes, etc.
Plus the rent went to the mortgage and "maintenance savings."
Helped keep an eye on the place.
Disadvantage was Setting up boundaries, like repairs n request only on wkdays , except emergencies.
In our area,
I have quadruplexes and a duplex. The quads have one insurance payment, one property tax, one mortgage. If any tenant is having loud parties, domestic violence, dumping trash, etc, I am informed quickly and can alleviate that issue.
With a single family home you won't know, until too late, if someone is trashing the home, drilling into the walls, having chaotic parties and destroying the home.
The insurance on each quad is only a few hundred more than my single family home. The tax is also a few hundred more. The tax and insurance on the duplex is similar to my home.
We started with and only have Single Family rentals. . That is based on simplicity as not having to deal with tenants squabbling but if we want out of the rental gig they can sell to broader based buyers, meaning a person that wants to live in it or an investor who will continue to rent it. A multi family you would only have an investor as a buyer which would be a more limited buyer base.
Duplex all the way. I have one duplex and one SFH. The duplex is in a C neighborhood. The SFH is an an A-B neighborhood but is outperformed in everyday bu the dulex. Multifamily is definitely the way to go in this market.
The only state that I would consider being a landlord is Arkansas. Landlords actually have rights there.
What about Alabama?
And oddly about the last state I would ever want to live in.
ideally buy a duplex or a triplex and live in one unit. after awhile you can move out and rent that out as well. I would avoid lower income tenants. not worth the hassle and you'll never make great money unless you have a ton of units and that's a huge headache.
more tenants = more revenue streams. if one turns to shit you at least have something coming in. If you have a problem in a SFH that asset is generating no income at all.
I personally started with a single-family and quickly added a small 4-unit building. Single-family teaches the basics, but small multifamily teaches workflow and tenant management without going crazy. You get the best of both worlds and learn early how to juggle multiple units before committing to bigger apartment complexes.
Teach you? Take a financial literacy course at your local community college before you get into this if you have no clue what you’re doing … apartment buildings can be great, but they can also be money pits … be sure to get the right person to do your inspection before you buy anything.
In my area, single family or duplex is easier in regards to governmental regulations. Any work done to a property with three or more units requires an architects stamp, even if minor like rebuilding deck stairs. Single family is bad enough as owner is not permitted to do any more than very basic maintenance.
I would definitely be willing to but a duplex but my area has very few purpose built units. I'm not interested in a single family that has been split into two units.
Where is this?
Chicagoland
Fortunately the current crowd in this department has been reasonable tecently but local governments have the potential to be very difficult and expensive
For a beginner it really depends. Apts are usually the first choice due to cash flow and opportunity for growth. But if you what more of a manageable lifestyle and easy to connect with tenant then single family home could be the best choice. Space is mostly the real difference here if you need more space in the place of living then single family home should be your choice.
If it’s your very first rental, a single-family home is almost always the smoother entry point. One tenant, simpler repairs, fewer variables, and way less stress while you’re learning the basics of landlording.
Apartments can absolutely scale faster, but they also come with more moving parts—multiple tenants, higher turnover, more maintenance, and more bookkeeping. Great long-term, but not always great for your first reps.
Most investors I work with start with a simple SFR or duplex to build confidence, systems, and reserves… then jump into small multis once they understand the rhythm of rental investing.
Start with a single-family home. This is the most direct way to become familiar with basic renting responsibilities without being overwhelmed; you have only one tenant, a single list of your problems, a more straightforward cash flow, and it will be simpler to sell if you choose to do so in the future. Two-family homes (duplexes) provide an attractive opportunity for more cash flow (as u/Accomplished_Bus2169 and u/Tyson2539 noted). They protect you against financial loss if either of your units sits empty (u/katsun14623), but they will expose you to two tenants' issues, as well as a shared system. You may have additional governmental regulations to navigate and comply with since you have two units (u/Ill-Entry-9707). Start learning the basics on single-family homes: maintenance, communicating with tenants, and emergency maintenance (u/Secure-Ad9780), before moving to multi-family units. Moving directly to apartments as a brand-new landlord means you are likely to find yourself trying to manage multiple sources of chaos before you learn how to manage them all.
Duplex
Start with a single family, learn the ropes, and once you’re comfortable, move to multi-unit. Master finding and screening quality tenants first, then scale up.
If you haven't been a landlord before start small. An entire apartment building of even 4 units can become overwhelming if it isn't brand new construction. SF is simple and you can learn your lessons and you won't be under rent control in most places
Honestly it depends on the person. A single family home and renting out a room is a great way to start. If you can afford the mortgage on your own a rented room would give you extra to put away each month. And a firsthand experience without a huge risk. It can be very overwhelming to handle everything yourself. A duplex or triplex is another great option. You could live in one for a few years and qualify for FHA. The other renter would help pay that mortgage. The more doors you have the less risk of not making the mortgage. But with more doors there is more cost. A triplex means 3 of everything. 3 water heaters, sinks, toilets, furnaces etc.
Before you buy anything you need to do your due diligence. Location is very important as well. Something next to schools and parks will probably rent better than something 10 miles outside of town. What rents for 1500 in one part of town might only rent for 1200 in another area. Rent research must be done as well. Some cities require a permit or license to rent them out. If you find a good property manager this could potentially be hands off for you.
This is going to be hard work but can set you up for life. My dad's cousin has over 100 rental properties and are doing very well. They started out renting a room. Then their house to a family and they bought another. Over 40 years they have built an empire and now that most of them are paid off they pay cash for new homes. But he made big sacrifices to get there. Long nights taking care of repairs and getting them rent ready. Many hours tied up in court for eviction and unpaid rent. Not including draining bank accounts while places were empty. It's hard work but it's not easy.
My parents own mostly single family homes locally and they have served us well, but I think it would be a much safer option to have a duplex so that if one unit is ever vacant, maybe the other won’t be. Our tenants usually stay with us for 5-8+ years.
Single family homes take longer to rent out, but usually rent for a premium. You also shouldn’t buy super big SFH’s, no more than 1500 sqft. The bigger homes are more expensive, which you’ll then have to price higher… which is harder to rent out. Also keep in mind SFH’s are going to be geared more towards families, so that means kids will be present which can mean more wear and tear.
Apartments on the other hand are safer, but usually these homes are in very bad shape and need 100k+ of renovations. SFH’s are usually in much better shape.
For a first rental, I went with a single-family home and it was perfect. One lease, one tenant, repairs are simple, and cash flow is predictable. It lets you get comfortable with landlord duties before scaling. You’ll make mistakes, but they’re easier to manage with just one unit.
Honestly, for a first rental, single-family is the cleaner entry point. One tenant, fewer variables, easier repairs. You get to learn the rhythm of being a landlord without juggling three people arguing about parking or utilities. Once you’re comfortable, multifamily feels way less intimidating.
Just a thought. When a single family goes vacant, zero cash flow. Just keep that in mind. Learning always, don't go too fast.
For a first rental, single-family is just less chaotic. One roof, one family, one set of headaches. It’s a clean way to learn the basics without juggling three maintenance calls at once.