Key takeaways
- SFR is simpler to finance and resell.
- Small multi (2–4 units) scales rent income per dollar.
- SFR appreciates closer to retail comps; multi to NOI.
- Multi vacancy risk is diversified across units.
- Tenants stay longer in SFR; turn faster in multi.
Core concepts
SFR economics
Lower yield, stronger appreciation, easier financing, broader resale market.
Small multi economics
Higher gross yield, faster operational learning, but financing rules still residential.
Tenant base differences
SFR attracts families and longer leases; multi attracts singles and shorter holds.
Exit liquidity
SFR sells to retail buyers; multi sells to a smaller investor pool.
Step-by-step framework
- 1Compare yield and appreciation in your target market.
- 2Underwrite one SFR and one duplex on the same street.
- 3Score tenant base stability for each.
- 4Pick the higher 5-year IRR after stress test.
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Common mistakes to avoid
- Choosing multi for yield without operational capacity.
- Buying SFR in a market with no rent growth.
- Ignoring tenant base differences.
Frequently asked questions
Is house hacking SFR or multi?
Duplexes win — owner-occupied 2–4 unit is the cleanest entry.
Which is more recession-resistant?
Multi — tenant diversification across units smooths income.
Which appreciates more?
SFR in retail markets; multi in cap-rate-driven markets.
Which is easier to finance?
Both up to 4 units use residential financing — equivalent.
Action checklist
- ☐Side-by-side underwriting completed.
- ☐Tenant base researched.
- ☐Stress test run on both.
- ☐5-year IRR compared.
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