Which do you prefer, and why? This is in a student rental area. Thanks for any insights you can provide.

My dear niece goes to local university. 7 young ladies rent a room form landlord. They also pay all utilities except for sewer.

I prefer SFH but I buy MFH

SFH are much easier to manage but MFH make more money. I can’t say if that’s true everywhere.

In a student area you can usually inflate rents and with a year lease are often being paid for 3 months while the place is empty.

The plus and minus of a multi is that all your systems, and all your liability, is under one roof. So if I have a problem at one house (bugs, fire, obnoxious people, whatever), it's isolated to that one house and everything else works just fine. But if I have a problem at a multi, I have the potential for many problems all interlinked together.

The plus for a sfh is that a responsible person takes care of the premises. I don't have to worry about yards, snow removal, ice, or anything. But for a multi, because the yard and the parking don't belong to any one person, it's most likely to be mine to manage. I need to build those costs into my rent. Likewise, people are more likely to struggle with parking if the spots aren't assigned. But what if this guy has this schedule, and is blocking someone else? Or what if that unit gets a certain parking spot, but now there's someone (with a giant truck) (with a bad ankle) who needs to shuffle into a more suitable spot? What if one spot is covered, and person A wants it because they pay more, and person B wants is because they've been there longer? etc. Lots of variables to control for.

That said, with students, a lot of those issues stop being problems. They're most likely to be on the same schedule and in the same phase of life. They're more likely to be able to adapt to their surroundings if someone's obnoxious because they don't have the experience to make an issue. The mix is going to turn over on a relatively frequent basis as people graduate or find new roommates. You want to control more systems (yard, air filters, pest control) so that you can be a presence and catch small problems while they're still small.

For student housing, a four-plex. As others have said, you don't want students to have a yard to take care of, etc.

DD,

If I had to start over I'd do multis. The value is based on the building's income.

My SFH's value is based on the neighbors and bank rates.

I believe the rent difference where I am may be more than most of you face. The multis can still cash flow. All the houses are negative. People rent houses but it’s usually one they’ve had for years.

I’ll give you an actual example of a multi I own vs SFH in the same area. I would estimate the property at about 1.6mil. Rents are 11,500. Market is around 12,000. In the same area a house that most people consider normal, 3/2 1600sq ft is around 1.2-1.5. It is really hard to get more than 6K.

I have a duplex in one town that I used for student housing. For the most part it was a pain. They paid electric and water. I always had to chase the water bill. Small shed on each side for a mower that they supplied and they covered snow as well.

Some were good. The newly married couple were best. I had three guys in one side and they partied like it was the end of the world. Only one hole in the wall, but I couldn't believe the amount of broken booze bottles outside. Brick building.

I no longer rent to students. This is a religious college and as one mother said, she sent her son there to get the wildness out of his system.

4 plex any day of the week.

Pro: buying based on income/expense; one unit goes empty, you got 3 other paying; 4 units paying for a roof; normally insurance is cheaper per door. Can sometimes be cheaper on the property tax side (per door basis)

Cons: people living beside people, causes people issues. Its like cancer, one bad unit... can turn the whole building into a bad building fast. It spreads... so more mgmt intensive. If you are not a "people" person, don't buy multi's. When you sell, more than likely it will be to another investor...