When it comes to investing in income producing property, you’ve got a lot of choices.
Some of the most common cash flow property types include:
- Single family homes
- Apartment complexes
- Self-storage facilities
- Office buildings
- Industrial parks
- Parking lots
- Triple net leases
For most investors though, especially if you’re new to the income property game, two types of property seem to stick out — Single Family Rental Homes vs. Apartments.
Both can be great investments and both have their pros and cons.
Which one should you choose?
Here are a couple things that come to mind when comparing:
Without a doubt it is easier to sell and there are more buyers to purchase your rental house versus an apartment complex.
However, with apartment buildings there are distinct advantages such as…
1. Easier to Manage
No more chasing your tenants across town to collect rent. All your tenants are in one location.
What happens when you have a vacancy in one of your rental houses?
You my friend are on the hook to cover 100% of the monthly expenses and mortgage payment.
Now what happens when you have a vacancy in a 20 unit apartment complex?
You have 19 other tenants covering your expenses and mortgage payment.
With apartments you are spreading the risk of loss across more units.
2. Economies of Scale
If you have 20 rental houses, you have 20 different roofs to maintain, 20 different utility and mortgage bills to keep track of.
There has to be an easier way…
With a 20 unit apartment complex, you are consolidating everything into one property.
3. Greater Profits
With houses and besides increasing rents, you are limited on creating other types of revenue.
For an apartment complex, it is common to create other revenue streams such as storage, parking and laundry income.
4. Ease of Financing
Getting a mortgage for a rental house can be painful. Trust me I have done it many times.
The process to get a mortgage on an apartment is no cake walk, but lenders are more concerned about the property operations than your personal credit and finances.
Do you need some guidance?
So, which do you buy? An apartment complex or a single family rental home?
Get in touch with me and we can dive into your financial goals and see what type of income producing property is the right fit for you. With my help, your investment options are wide open and the profit potential is just waiting for you!