What Is a Multi-Family Home in Real Estate?
A multi-family home is a residential property that contains two or more independent living units under one roof or on a single lot. Each unit has its own kitchen, bathroom, and entrance, allowing for both personal occupancy and rental income potential.
🏘️ How Multi-Family Homes Work
Multi-family homes include duplexes, triplexes, and fourplexes as well as larger apartment-style buildings. Properties with up to four units are considered residential and can qualify for traditional home loans, while those with five or more units are typically financed through commercial lending. Owners can live in one unit and rent the others, or use all units as investment properties.
🏠 Multi-Family vs. Single-Family Homes
- Number of Units: Single-family homes contain one dwelling, while multi-family properties have two or more.
- Income Potential: Multi-family homes generate rental income, while single-family homes are primarily owner-occupied.
- Financing: Up to four-unit properties qualify for residential loans; larger ones are considered commercial.
- Maintenance: Multi-family homes may require more upkeep but can offset costs through rental income.
✨ Pros and Cons of Multi-Family Ownership
Advantages: Reliable cash flow, easier scaling for investors, and potential tax benefits. Ideal for those looking to live in one unit while renting out the rest.
Drawbacks: Increased management responsibilities, higher maintenance costs, and potential tenant turnover can add complexity compared to single-family ownership.
📢 Selling a Multi-Family Home FSBO
Selling a multi-family home “For Sale by Owner” lets investors save on commission and keep more of their profits. With Brokerless, you can list your property on the MLS for one flat fee and gain exposure on Realtor.com, Zillow, and local MLS platforms without paying a 6% agent commission.