Multi Family v.s. Single Family

Every real estate investor has to come to the decision of investing in single family homes or multi family properties. What is the difference? And what are the benefits to each?

Single family homes are what most people are familiar with. The typical 2 or 3 bedroom house not connected to any other property. These investments generally cost less than multi units because, well you're getting one not multiple units. These are much more prevalent when looking to buy property in Pittsburgh. Most mortgages will be sufficient to purchase a single family home. Cash of course works well too!

The pros definitely include the many available properties to pick from. There are an unlimited amount of individual homes hitting the market throughout Pittsburgh. Also, they can be financed through pretty much any mortgage type. It is also much easier to sell a single family home in Pittsburgh. You open yourself up to the whole market of occupied owners as well as other investors. They call this being liquid when it comes to selling.

The cons include having all different utilities, mechanicals, and different floor plans. You can have several properties, and need to replace multiple roofs, HVAC, or electrical work. This can make repairs more costly and consistent as the properties are not all bundled under one roof. If a tenant moves out, you also are now receiving 0$ income. This can make it very unprofitable to own property and cover all the expenses.

Multi family on the other hand is any property with 2 or more units connected under one roof. This makes it much easier to maintain. There is only one roof, utilities can be run the same way through each unit. Also, utilities can be separated so each tenant will pay their own bill. The floor plans are generally the same as well. The biggest advantage to multi family investing is if a tenant leaves or is evicted, there are multiple other streams of income for the building to cover expenses.

The downside to multi family investing in Pittsburgh is the price tag. These properties are generally more expensive. There also are much less opportunities compared to single family houses. The last concern with investing in multi family properties is the sale on the back end. The only person who will be buying this building is an investor or someone who wants to live in one unit and rent out the rest. This makes the market very small for you to liquidate the property on the back end.

So what's the conclusion? They are both very different investment strategies, but just like anything else there is something for everyone, and it's about finding the strategy that fits your goals the best. Each investment strategy will have their pros and cons. The only thing that matters is to learn the ins and outs of each before making the leap into buying properties in Pittsburgh.