If you’re running the numbers, it might appear that purchasing a multi-family investment is a better choice. On paper, the ROI is higher. However, I’ve noticed something interesting about single-family properties that makes them a better long-term investment vehicle.
There’s an interesting psychological pull that occurs in a single-family home. Tenants love coming home to a single-family house. It feels like their house, and they want to care for it. It just feels good to come home to an actual house with a driveway and a yard. Their children can grow up in an actual house and sleep in their own bedrooms; their pets can play in the fenced-in yard.
They view the property as their home, and I love that. Not only do the tenants take care of the house, but they also tend to stay a long time! It’s not uncommon for me to sign a multi-year lease on a single-family home.
If you look at the numbers, multi-family rental properties tend to have a higher tenant turnover rate. The tenants simply don’t get attached like they would to a single-family home. An apartment or duplex simply doesn’t have that homey feel.
I do own a few duplexes, but there’s something about single-family homes that works for our business. I don’t have to deal with some of the issues that accompany hosting multiple tenants on the same property. There are bound to be issues when you have many people living in one space. In single-family homes, you don’t have your tenants complaining about each other.
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