As a landlord who buys real estate as rental property, you may have wondered what the benefits are of choosing two family homes over single family properties. Here are some of the major pluses and minuses to investing in a multifamily property.

More Income, Less Risk

There is more potential for a higher rental income with a multifamily property. When you are charging several separate adults with their own incomes, you can get away with a higher price than you could if you were renting a property to a single family. And although house sharing is becoming more popular even for unrelated adults, many people still value having their own space to come home to.

There's also less risk of having zero income for the month. Since you'll be renting out several different spaces, you may have a partially full house, but the chance goes down that you'll be completely unbooked and run into cash flow issues. If this is a big concern for you, a property manager can help you to keep the units booked continuously.

Easier to Manage

If you are looking to expand your empire of rental properties in one city, it can be beneficial to pony up the cash for multiple units instead of single units because they are easier to manage. Since all of your tenants reside on the same property, you'll only have a single location to keep tabs on and visit whenever there are issues.

If you go through a property management team, like Management Services, it can be even simpler; these companies will usually offer you a better rate on multiple units that are on the same property. They can also help you simplify the process of booking routine services such as lawn maintenance and repairs.

Requires More Resources

One problem that comes up with new landlords is that they don't qualify for the jumbo loans that a multifamily property requires. However, there are ways to overcome this problem, including signing more partners onto your rental properties, either for a percentage share of the income or for a full buy-in on the property.

Problems Between Tenants

Another issue that you'll have to deal with is when your tenants become a problem to each other, either through fights or through fires or floods that affect other tenants. You can mitigate these problems by having strong policies for fire protection and tenant privacy, or by outsourcing management to a property manager that will intervene between tenants.

Buying two family homes can be a great way to boost your rental income while cutting down on the time you spend maintaining your units. As long as you have a solid plan for financing and managing your new properties, a multifamily unit may be the way to go.