Choosing between a single-family or multifamily property is one of the biggest decisions a landlord can make. Each property type comes with its own advantages, challenges, and return profiles; what’s “better” depends on your goals, risk tolerance, and capacity to manage tenants.
Generally, the single-family house will be the first place an investor looks; it's the most straightforward, familiar and common property type. But while less common, some investors may consider purchasing a multifamily property instead, with the opportunity for multiple tenants at the same time.
In this guide, we’ll compare single-family and multifamily rental properties across key factors like cash flow, management, tenant turnover, financing, and insurance coverage, so you can decide which is the right fit for your portfolio.
What is a single-family rental property?
A single-family rental is a standalone home rented to one household. It typically has its own yard, private entrance, and utility connections. These homes are popular in suburban areas and appeal to long-term tenants like families and professionals.
A large majority of houses on the market are single-family homes. That's just what it is, really; a house. It has no other units attached to it, and the tenant would be either a single person, a couple or a family of related people.
You have one tenant at a time, either on a short-term basis or for an entire lease term. You get one rent check per property per month.
If you're reading this, chances are you've lived in a single-family home at some point in your lifetime. According to US News, 31 percent of renters in America live in single-family homes, the second-most popular dwelling in the country behind apartment units. For those who don't have the capital to buy an entire apartment building, the single-family home is the most popular choice – and where a majority of first-time investors look.
Learn more: What is a single-family home?
What is a multifamily rental property?
A multifamily property includes two or more separate housing units within a single structure. This includes duplexes, triplexes, fourplexes, and apartment buildings. Each unit has its own lease, and the property generates income from multiple tenants simultaneously.
By purchasing a multifamily property, whether it be a small apartment building or a duplex, you unlock the potential for multiple vacancies and tenants at once.
Some multifamily properties, like a townhouse, may fall between categories depending on how they’re structured or financed.
Cash flow and income potential
Multifamily properties typically offer stronger cash flow because they generate income from multiple tenants. If one unit is vacant, the others still produce rent. This reduces income volatility and boosts return potential—especially if you’re aiming to scale quickly.
Say you have the option to purchase a single-family home in an area where the average rent is $2,000. There's also an option to buy a duplex in the same area. The duplex will of course be more expensive and you may not be able to charge both tenants $2,000 – duplex units may have less space or privacy – but if you charge $1,700 each, that's $3,400 of revenue per month.
And, if you have a vacancy in one of your units, the second unit will still be paying rent for that month. If you have a vacancy in a single-family home, you won't get rental income at all.
Single-family homes tend to produce lower gross income but can yield solid net returns in the right market. They also tend to have lower operating costs and may appreciate more consistently over time.
Management and maintenance requirements
Managing a multifamily property requires more effort—more tenants, more lease agreements, and more potential for wear and tear. If you’re not using a property manager, expect a steeper time commitment.
Single-family homes are easier to manage, especially for first-time landlords. Fewer service requests, fewer turnovers, and no shared walls make these properties ideal for a hands-off approach.
Tenant turnover and lease stability
Tenants in single-family homes often stay longer. Families or professionals are more likely to sign 12-month leases and renew if they like the property. That reduces turnover costs and vacancy periods.
Multifamily tenants tend to be more transient, particularly in urban areas or smaller units. However, if one tenant moves out, you’re not losing 100% of your rent stream.
Financing considerations
Financing for single-family homes is often easier and more flexible. You can qualify with a traditional mortgage and choose from a variety of loan programs, including those for first-time investors.
Multifamily properties (especially 5+ units) may require commercial financing, larger down payments, and stricter underwriting. However, the increased rental income can sometimes offset higher financing requirements.
Insurance differences between property types
Landlord insurance is essential for both single-family and multifamily rentals, but coverage needs vary.
A single-family home may only require basic landlord insurance, including liability protection, dwelling coverage, and loss of rental income.
Multifamily properties often need broader protection. You may need higher fire damage limits, equipment breakdown coverage, and additional liability depending on the number of tenants and shared spaces.
Which property type is best for you?
If you’re a first-time landlord, a single-family home is a great way to enter the rental market. It’s easier to manage, requires less capital up front, and can offer solid appreciation and rental demand.
If you’re focused on maximizing cash flow, scaling fast, or using real estate as a full-time income stream, a multifamily property may be the better fit—especially if you’re open to hiring a property manager or living in one unit (house hacking).
More on single-family homes:
- Pros and cons of renting out a single-family home
- Is a single-family home a good investment?
- How to insure a single-family rental property
Final thoughts
There’s no one-size-fits-all answer when it comes to single-family vs. multifamily rentals. The right choice depends on your financial goals, experience level, and willingness to manage tenants or hire help.
Whichever path you choose, make sure your investment is protected. Get a quote from Steadily and get the right insurance for your rental property.
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