You're excused if, when you first hear the phrase
multi-family house, you imagine it to mean a house in which different families reside. That's the first image that pops up in most of our heads when we hear those words, and while the sentiment isn't completely wrong, clarity is always king. Multi-family houses, commonly known as multi-dwelling units (MDU) here in America, are actually multiple, separate houses that are part of one or separate buildings within one complex. An example of multi-family houses is an apartment building. These are prevalent all over the United States, and come in, you guessed it, multiple styles, too.
Variety is the spice of life when it comes to different designs of multi-family homes. Here's a list of them. We're sure you'll find one, or two, that best suits your budget.
First on the list of multi-family house styles is a Duplex, which is a two-story house made for two families, with each family occupying a separate story of the house. Duplexes have a common basement, front entrance, foyer, staircase to the second floor and a similar back entrance.
The second style is a Triplex, which is similar to a duplex, with the difference being the addition of a third storey. These are common in older neighbourhoods here in America.
The third multi-family design style is a Quadplex. Quad means four, which means a quadplex is one story higher than a triplex. In some cases, the arrangement of the apartments differ, and the lot size may be larger than that of a normal house.
Number four on the list of of design styles is a Semi-detached house, which consists of two separate, side by side houses with separate entrances and no common inside areas.
Next on the list of multi-family house styles is a Townhouse, which is a house attached to other townhouses, which are side by side and may each have multiple floors with separate entrances.
Number six on the list of design styles is an Apartment building. Apartment buildings feature multiple apartments on each floor, as well as multiple floors which vary in sizes. The size ranges from apartments with a few units, to mega buildings with hundreds of apartments and floors. The inside entrances to the apartments are usually in the hallway.
Last on the multi-family house list is the Mixed use building style. This building features space for commercial, business and office use, as well as space for residential use.
If you want to invest in one by building or buying, do thorough research before you decide. Enlist the help of a professional architect and browse Homify for thousands of images to inspire you.
You wouldn't want to spend your hard earned money on a bad investment, would you? Here are three reasons why you should consider investing in a multi-family home.
Although apartments cost more than single-family homes, they're a lot easier to finance. Buying a single rental unit could cost you around $30,000, while a multi-family building could go well into the millions. Securing a loan for a single-family house might seem easier than raising money for a million dollar complex but in truth, a multi-family property is more likely to be approved for a loan than the average home, simply because multi-family buildings consistently generate cash flow every month.
The second reason to consider investing in multi-family houses is that growing a portfolio for them takes less time. Acquiring a 20 unit apartment building is easier and more time efficient than purchasing 20 different single-family homes.
The third reason is that property management makes a lot of financial sense. Some property investors hire a property management company to handle their rental operations. A property manager is paid a percentage of the monthly income that a property generates, and their duties might include finding and screening tenants, collecting rent payments, handling evictions and maintaining the property. Many single-family homes do not have the luxury of contracting external managers because finding people to manage small real estate doesn't make financial sense.
Whether you're a home-buyer or planning to invest in a multi-family house, you need to weigh your options before deciding on anything. Here are the pros and cons of a multi-family house, starting with the good news.
Multi-family houses pay themselves. Even if you occupy one part of the building, the monthly cash flow from tenants can go towards paying off the building.
It's easier to finance a multi-family house than a single-family house because of the monthly income.
Managing multi-family property is easier than managing single-family property. If you live on the property, collecting rent and maintaining the property is as easy as going next door.
As for the cons, living in the sane space as your tenants means you'll get tenants coming straight to your door to complain, night or day.
Living on the premises limits your renters. Most tenants prefer space to invite friends over and make a noise once in awhile, and don't like the idea of their landlord being so close.
You could also butt heads with your tenants due to a conflict of interest, and having close relationships with your tenants could make it difficult for you to be objective.