Real estate investments in multi-family properties have a number of important differences with investments in single-family rental homes.  What are you getting into when investing in a multi-family property?

• Rental cash flow is more dependable from multi-family properties.  You continue receiving income from occupied units even while others are vacant.  A vacancy can be a chance to improve that unit without forgoing all of your rental income.

• Maintenance separates the investors who are up for multi-family from those who aren’t.  That’s because frequency of maintenance needs is much higher in multi-family units.  In addition, Tenant management goes alongside physical property maintenance.  Your service level is key to attracting happy renters who stay and pay on time.

• Financing, taxes and legal requirements for property condition are more complex, but also more cost-efficient, for multi-family than for single-family properties.  Economies of scale usually provide lower costs per unit for multi-family properties than for a single-family rental.

• When you are ready to sell, the market for multi-family properties is much smaller than for single-family homes.  Selling may take longer.

For the pluses such as rental income being higher and more consistent, there are concerns including a significantly smaller buyer market when you are ready to sell.  Multi-family properties do enjoy lower costs per unit for most expenses, from finance to maintenance.  If you are a first-time investor in a rental property, a single-family rental may be safer, but multi-property investments are worth consideration when the time is right.

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