Multifamily investments vs Single Family homes

The differences boils down to one word - Control.

There are different ways to look at how control affects many aspects. I will touch upon two very important ones.

1. Sell Price: Single family home prices are out of your control. They are solely dependent on the local market prices and your investment value collectively go up, down or stay the same along with hundreds of homes in your neighborhood. Where as in Multifamily, you are in the drivers seat in increasing the valuation with multitude of levers available at your disposal. Like, adding paid amenities, upgrading the units for rent premiums and improving the marketing activities which directly & positively impacts Net Operating Income. Thus increasing the over all valuation.

2. Exit timing: There is no way you could know when is the right time to sell a single family investment. Its hard to tell if the valuation has reached the peak or if there is still some runway left. You may or may not get out of the single family investment maximizing your returns. Where as in Multifamily you know based on your upgrades and future rent prospects, if you have more run way or reached a point of diminishing returns. And you can with high percentage of certainty determine at what time you will reach your peak returns and when your returns reach a point of declining rate.

To your Legacy.