There’s a difference between single family and multi-family property, and today we’re talking about how these homes can affect your investment strategy. This is an overview of the differences between the two, and some considerations you might have when investing in one or the other.
What’s a Single-Family Home?
A single family home, or a detached home, is a property that doesn’t share any walls with another property. It’s typically on its own lot, and you’re responsible for the house in its entirety, as well as the lot. It’s a separate property.What is a Multifamily Home?
A multifamily home can include condos, townhomes, and any high-density structure. These properties typically share a wall.Multifamily Real Estate Investing
If you’re owning or investing in a condo or a townhome or an attached product, you own from the frame in. So, you can do whatever you want inside, but from the frame out, it’s the business of the HOA. Not every property is managed by an HOA, but in Utah, that’s pretty common. It’s important that you check with the HOA to make sure you can rent it out. FHA guidelines say that only a certain percentage of homes in a community can be rented. Usually, it’s no more than 20 or 30 percent of homes. The rest have to be owner-occupied.You don’t want to invest in a property with plans to rent it out and then have the HOA stop you. Make sure you’re working with a real estate agent who knows to watch out for this. It would be a shame to buy an investment property and then not be able to use it. When you do rent it out, you’re often grandfathered in, or you’re put on a waiting list. You want to be careful, and you want to know.
Single Family vs. Multifamily
What I like about investing in condos and townhomes with an HOA is that the HOA takes care of the exterior of the home. If there’s a roof leak or the driveway is cracking or something has to be repainted, the HOA will generally take care of those exterior issues. It’s not an additional expense for you.HOA fees can be challenging, but look at what you’re getting. Paying $500 a month in fees is okay if the amenities are of value to you and your tenants. A lot of HOA fees include water, sewer, and garbage. If there’s a pool and tennis courts and a fitness center, you’ll have an easy time attracting tenants who want these things.
This is just the tip of the iceberg on single-family real estate investing and multifamily investing. We can help you find any type of home and also help you manage it. We have a rebate program where we earn a commission and then give a credit back to you when you use multiple services. We can help you from A to Z. If you have questions about property management or want to talk options, please contact us at Property Solutions of Utah.
