Differences between single-family and multi-family homes

If you are willing to invest in real estate, you have probably considered buying single-family or multi-family homes. Although both are places to live, they are different in several ways. The differences between single-family and multi-family houses must be thoroughly studied before making the decision to invest in any type of property. This will help you avoid buying a property that is not suitable for you and your budget.

Current tenants

Perhaps the biggest difference between single-family and multi-family homes is that multi-family homes usually have tenants. These tenants have probably lived in the building for several periods, and paid the rent to the previous owner. This may be useful, because the collection of rentals can allow you to compensate part of the purchase price of the property. On the other hand, dealing with tenants can be unpleasant. For example, some tenants may damage your property, and you may have to pay for repairs.

Find new tenants

In single-family homes, you just have to find a family that moves into the house. Families who move to a single-family home tend to stay there for long periods (usually more than a year). Multi-family homes may have frequent vacancies that occur every few weeks. Because of this, you will have to find new tenants on a regular basis. If you cannot fill an empty house, you lose the rent for that month. This loss of income can be compensated, however, by the recurring costs charged by the rental agents.


Single-family homes are easier to maintain, simply because there are fewer rooms and things that can be broken inside. For example, a home for a single family may have only one bathroom. A multi-family home could have six bathrooms (one for each separate residence in the building). If many things go wrong with the multifamily housing pipes or the electrical system, this can cost you a lot of money in repairs. You are more likely to have problems in an old building, but new ones will also have their share of problems.

Commercial value

Unlike single-family homes, multi-family homes are considered commercial property. Because of this, they are handled and viewed differently in the real estate market. If you want to invest in a multi-family home, you must work with a commercial real estate agent. This type of agent specializes in commercial properties, and will be better able to help you than a residential agent.

Obtaining financing for a single-family home depends mainly on the investor or the credit rating of the buyer. To get financing for a multi-family home, however, the building must be seen as capable of generating income. If you have little chance of being profitable, banks will not be willing to take the risk of providing you with a loan to buy it.