Which is wiser: start with a multi-unit or start with a single family?

My fiancee and I are looking to purchase our first property in New Hampshire either at the end of this year (after we marry) or sometime next year.  I'm a seafarer and am interested in the acquisition of multi-unit properties to help provide income so that I can one day come ashore.  Both of us like the idea of multi-units (we'd invest in the Manchester area) but we're short-stacked right now financially speaking.  

Fortunately, thanks for family friends, we've a wealth of skilled labor at our disposal which makes renovation more affordable than it otherwise would be.  So the question is: Given a limited starting supply, does it make more sense to buy a small affordable single-family home to live in and renovate, both raise the value and add equity, or start by buying a multi-unit that we wouldn't live in but would collect income from to eventually use toward the acquisition of our own home?  

I'm not sure if it's relevant, but we're actually more interested in living in the North Conway area than Manchester; it just so happens that Manchester has more mutli-unit properties available.  If we bought a single-family, we'd prefer it to be in N. Conway.  

  • August 30 2013 - Manchester
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Answers (9)

Profile picture for Brookstone Mortgage
If you are "short-stacked" financially, you should definitely not purchase a multi-unit property as a rental. You are looking at increased down payment requirements for starters and if you have never been a landlord before, you don't want to start cold and with no cash for repairs.
  • August 30 2013
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My suggestion is to start off with a single family home and if that home needs fixing up then you can get used to the fixer up way of things on a smaller scale.  If you jump right in to the multi family home fixer upper, think of roof, siding, and heating system costs, multi furnaces, etc.  You will need some money in the bank to fix things as they break down or even to maintain.  As always you want to keep in mind that if you get a tenant that turns out less than stellar and stops paying rent you will need to have funds in the back for back up.  Good Luck!

  • September 12 2013
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I am a pioneer in my field and a risk taker and a landlord So I say go for it the time is now ... You are going to make more money Quicker being a landlord with multi tenant properties ask a realtor in your area to find you properties which already have tenants who may want to stay that way you already have systems in place . Be sure and follow up with me and let me know how it goes for you, Best of luck Lydia
  • September 12 2013
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If you don't have prior experience in managing tenants, it would be good if you start with a single-family unit and work your way over time. Managing tenants can be both difficult and tedious.
Also, multi-family units require high maintenance costs. If you don't have enough money to back up your property, you will fall short in no time.
  • October 05 2013
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I live in the Manchester, NH and it always make more sense to buy a multi-family home and have someone else pay half your mortgage. Once you have owned it for a few years you can use the rental income to help you qualify for a single family home down the road. This also allows you to have passive income from a rental.
  • October 16 2013
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If you are comfortable with buying a multi family I have helped customers with a program, in limited supply, availability and if you and the property are eligible, that allows for 5% down without mortgage insurance in NH. Please contact me via my profile if you would like to discuss.
  • November 28 2013
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Profile picture for Dalberth Group

Being a landlord can be a lot of work... And if you're a seafarer and won't be around to help with the calls from tenants, then the single-family option may be the way to go.  There are also financing considerations that may lead you in the direction of the single family, but this can vary based on property, location and lender.

Good luck.

  • November 28 2013
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Profile picture for JoshBarnettREIB
Depends on your end goals and exit strategy.  
  • November 28 2013
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Profile picture for gator70
Depends on the market and they all are different. The ROI is better on multi units but appreciation is less.
With small SFH's, you can leverage up easier.
  • November 28 2013
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