Why do I favor single-family homes for our rental portfolio?
There are many reasons, but the simplest is this: they work.
Most people picture successful real estate investing as duplexes, quadplexes, or small apartment buildings. Our rentals are different: almost all are stand-alone single-family houses (our Airbnb is the only condo). For the most part, single-family homes cost less than duplexes, and you only need one tenant. In some markets, demand is low, so filling multiple units can be a real challenge.
Sometimes a rental comes with tenants already in place — that can be a blessing or a headache. But managing a single-family property yourself is often doable if you pick homes within a short drive. One of the keys to DIY management is choosing rentals within about a half-hour of where you live. We’re within 15 minutes of ours; I’ll even bike over with tools in my backpack when something needs fixing.
Financing is easier, too. A duplex of comparable quality often costs about 50% more, and a quadplex can cost twice as much. More on financing later.
Our first single-family rental took almost two months to rent. Two things caused the delay: timing and condition. We closed on December 30 — winter is a slow season, and people move less from November through March. Also, the house was a mess. The previous owner hadn’t cleaned; even the ceiling fan in the master bedroom was thick with dust. Potential renters aren’t impressed when mops, buckets, tools, and loose hardware are everywhere.
Avoid showing a rental on winter evenings. It’s dark, people are tired and hungry, and an unfurnished house full of maintenance junk won’t look appealing. Instead, schedule open houses on sunny weekend mornings. Natural light helps, and people are in a better mood.
Single-family homes tend to attract more responsible tenants, which makes being a landlord less stressful. If you’re managing properties yourself, SFHs are ideal — especially higher-value homes in desirable neighborhoods, where you’ll be less hands-on.
Compare that to multi-unit properties in so-so areas. My friend, who focuses on multi-units, has plenty of horror stories: coin-op washers broken into, a chain smoker who ruined a unit with nicotine, and a toilet leak from an upper unit that flooded the lower one. Shared walls mean noise complaints, blocked driveways, odd smells, and stolen packages — all headaches for landlords.
Listing rentals is simple and free on sites people actually use. I used Craigslist exclusively until 2019; now I list on Zillow as well when leases end or new units become available. Here’s an example of one of our Craigslist listings:
$1495 / 2br – 822ft2 – Home Available June 1!
Cozy 2 bedroom house with nice-sized closets, and 1 full bath for rent (in neighborhood XYZ). The home has a large open kitchen and dining area, with gas range/microwave, dishwasher, and stainless-steel refrigerator. Other features: Washer/Dryer/Central Air/ and a brand new furnace installed in 2018. There is a one-and-a-half car detached garage with opener. The backyard is fenced-in, making it perfect for dog lovers.
TERMS: Rent is $1,495 per month with a $1,495 security deposit ($1,475/$1,475 for a 2-year lease). A single dog (40 lbs. or less) is welcomed, for an additional $25 per month pet-rent, and an up-front non-refundable pet-fee of $200. All pets must be approved by the landlord, before occupancy. Tenant is responsible for all utilities, snow removal, and landscape/lawn care.
Please respond to this ad to arrange a showing. The following are required to apply for a lease:
– Completed application, including credit and rental history (credit and background checks are performed)
– Application fee of $40 per adult tenant
– A valid driver’s license or passport
– A CREDIT SCORE OF 650 OR HIGHER IS REQUIRED
The home is located ______________. Great dining establishments, libraries, post office, and grocery stores are all within a walking distance!
With multi-unit buildings, you often need separate, detailed listings for each unit, which can confuse renters and sometimes put them off if they don’t like who’s already living next door.
Down payments are usually lower for single-family homes. You might pay 15–20% down on an SFH instead of 25% for a duplex. On a $150,000 property, 20% down is $30,000 versus $37,500 at 25% down. That $7,500 difference can cover repairs or other investments. Cash matters — you want to minimize out-of-pocket money to get a property started. That’s why I rely on cash-on-cash analysis to evaluate deals.
Tenants can handle lawn care, snow removal, and basic landscaping for single-family homes, which saves money. With larger multi-unit buildings, those chores often fall to the landlord and can eat into returns — especially where winters are heavy. My mentor had a boiler that failed in deep cold, and because it served four units, he had four unhappy tenants and eventually replaced it for nearly six grand. If it had been a single-family house, only one set of tenants would have been impacted.
Landlords are still responsible for major landscaping tasks like planting, pruning, and tree removal. Once, a tenant offered to pay to remove an old stump; we split the cost. I handle seasonal gutter cleaning twice a year. Luckily, most of our rentals are single-level ramblers, so ladder work is less risky.
I also prefer having a single satellite or cable provider at each house to avoid a mess of dishes and questionable roof mount jobs.
When it comes time to sell, single-family homes are easier to move than duplexes or quadplexes. They generally appreciate more because they’re in higher-demand locations. There are more buyers for SFHs than for multi-unit properties, so when the market heats up, single-family homes are often the most sought-after.
The downside of SFHs is vacancy risk: one empty house means zero rental income. That’s why it’s important to buy solid houses in high-demand neighborhoods. Another downside is that single-family homes often don’t cash-flow as well as multi-units, since multi-unit buildings have maintenance efficiencies — one roof, one foundation, shared systems, and sometimes shared laundry — which lower costs per unit. Multi-units also let you handle inspections and repairs at one address instead of driving around to separate houses.
Despite those cons, I still think single-family homes are great for new landlords. In five years with four units, I haven’t had to evict anyone, I haven’t had trouble filling vacancies, and cash flow has been steady. Best of all, our houses have appreciated a lot — on average, each has risen about 36% in value since purchase.
If you’re starting out, I recommend two books: Building Wealth One House at a Time by John W. Schaub, and First-Time Landlord by Janet Portman (a NOLO guide). I used both a lot when we began. I also follow a couple of blogs focused on SFHs: Invest Four More by Mark Ferguson and Afford Anything by Paula Pant. They take different approaches, but both strongly back single-family investments.
And if you want help, I’m happy to walk you through how I find and manage single-family homes as long-term wealth builders. Look me up and let’s start your journey.