Despite homebuyer activity reaching all-time highs over the past year, the rental market is as necessary as ever. Throughout the pandemic and its subsequent recession, Americans have found themselves feeling at odds with investors. Most specifically, at odds with landlords and property managers. In these trying economic times, many struggled to pay rent. 

Through the ups and downs of the pandemic, one real estate asset class has emerged on top: single-family rental properties. In the past, commercial real estate investors have looked down on the humble single-family home. After all, they were only familiar with management horror stories and the headaches of a bad HGTV fix-and-flip.

At REI Nation, we’re often asked if we would ever buy or manage multifamily properties. Oftentimes, these questions pertain to duplexes, quads, or other small apartments. 

Real estate has been a wild ride this year. From predictions of a market crash to the unexpected frenzy of market activity, it’s been anything but predictable. Real estate investors have had to cope with their fair share of concerns, too. 

According to Forbes, single-family rentals (SFR) are growing in popularity among investors of all calibers. While traditionally investing in single-family homes is seen as a launching pad to bigger and “better” things, more and more investors are seeing the merit in pursuing SFRs for their portfolios.

We’ve all heard at some time or another that real estate is a great investment. It’s true—investing in real estate can be your key to financial freedom and the retirement of your dreams. Unfortunately, a lot of people make the mistake of conflating “great investment” with “easy investment.”

Every real estate investor starts somewhere. Deciding how you want to invest is one of the toughest decision you’ll make in the beginning, and you’ll likely find yourself caught between a few big choices: commercial or residential real estate and, if residential, single-family or multifamily properties?

(We’re not here to debate the pros and cons between the types of investments. If you’re interested in that conversation, we’ve covered it extensively here!)

Single-family properties make up a massive portion of the investing market: they’re an easy place to start for new investors, largely because they’re more affordable than buying an apartment complex or an office building. 

In residential real estate investment, there’s always contention between investors that prefer single-family investment properties and those that prefer multifamily investments.

We’ll go ahead and say this: absolutely every investor will have their own preferences. Every type of investment will have its own pros and cons, and what attracts certain people may not sway others. What might be your deal-breaking flaw might not be someone else’s.

That said, there are some very clear advantages and disadvantages between single and multifamily properties that should be considered. As a real estate investor, you may want to experiment and try it out for yourself!

Many investors choose to start with single-family properties simply because the barrier to entry is lower. Some prefer to invest in both, while others prefer to deal exclusively in multifamily housing. Others specialize in something else altogether!