Single-Family vs. Multi-Family Properties: What Should Charleston Investors Buy? - Article Banner

If you’re thinking about investing in Charleston rental properties, one of the first decisions you’ll have to make is what type of investment you want to purchase. This is a diverse market, and investors will do well with single-family homes in established neighborhoods, condos and townhomes in gated new constructed communities, duplexes and other multi-family properties, or even apartment buildings and units within those buildings. 

The best investment for you depends on a number of factors, starting with your own investment goals. 

 As Charleston property managers, we work with investors all the time, and smart investors will partner with a management company before they buy. We can tell you how much rent you can expect to earn, what types of repairs and upgrades will be necessary before the property is rent-ready, and what you can expect in terms of maintenance costs throughout the life of your investment. We can talk to you about the local market, tenant demographics, vacancy rates, and competing properties. 

You can also leverage our expertise when you’re deciding what type of property to buy

Let’s take a look at how you’ll know whether your investment goals are better served by single-family homes or multi-family properties. 

Single-Family Investment Homes in Charleston

Single-family homes are in high demand, particularly in the Charleston rental market. A lot of tenants are putting off the plans they might have had to buy a home. With rising interest rates, those mortgages are getting more expensive. This keeps tenants in the rental market for longer, and creates a higher demand (and, thus, higher rents) for the homes that tenants would have wanted to buy. 

It’s a great time for single-family investments. While demand is high, inventory is still catching up. A lot of owners sold their homes over the last few years, leaving the market without an abundance of homes to rent. 

There are several benefits to investing in this type of property: 

  • You’ll earn more in rent. In general, single-family homes command higher rental values than multi-family properties. If you’re renting out a detached, single-family home in a residential neighborhood, that property is likely to earn more in rent than a unit in an apartment building. 
  • Less vacancy and turnover. Your home will rent quickly. And, you’ll be more likely to hold onto your tenants. Many residents who are specifically looking for single-family homes want the experience of homeownership without the expense or the commitment. Your pool of potential tenants will be much deeper, and you’ll find that once a well-qualified tenant gets approved and settles in, they’re likely to renew their lease agreement time and time again. 
  • Reliable high-quality tenants are more likely. With rents higher in single-family homes, you’ll attract tenants with more income and stable financial histories. You’ll likely have less to worry about when you do a complete and thorough tenant screening. It’s less likely you’ll need to worry about property damage, lease violations, or late rent. These tenants are looking for the privacy and space a single-family home can provide, and they’re willing to pay for it. 
  • Rising appreciation. Your property will grow in value faster when it’s a single-family home. This will increase your return on investment (ROI) and allow you to build more equity, faster. 

Single-family homes come with drawbacks as investment properties, too. Maintenance might be more expensive, for example. You’ll have to keep up with landscaping if there’s a yard. Deciding who will be responsible for lawn care needs to be established before you rent out the home. 

Owning a single-family home also puts you at a higher risk for losing money during vacancy periods. It will take time for you to turn that property over, and you’ll have no income on your rental home while you wait to rent it out again. 

Multi-Family Investment Properties in Charleston

There are several different types of multi-family properties that you can buy. Look for a duplex or a triplex if you want something similar to a single-family home with several different units. You can also consider a small apartment building with four to 10 units. 

What are the benefits to investing in a multi-family property? Here are some of them:

  • Many tenants are looking specifically for a multi-family property. Residents who don’t want the responsibilities that often come with a single-family home are looking for an apartment or an attached unit. 
  • The risk of vacancy is less expensive. If one tenant moves out and you own a three-unit building, you still have two rents coming in while you turn over the vacant unit. This will reduce the stress of having to spend money while you don’t have any rent coming in.  
  • There’s a higher cash flow potential. Rents are predictable and consistent, and the turnover period on an attached unit is always shorter than on a single-family home. 

Many investors find it less complicated to invest in multi-family properties. You can take out a single loan to finance multiple investments, and the power of unit economics will often keep costs more reasonable. Insurance costs, property management costs, landscaping, pest control, and even preventative maintenance bills are a lot lower per-unit than if you owned a handful of single-family homes. 

Charleston Property Management 

Choose the Right InvestmentWhether you invest in a single-family home or a multi-family property, or both, you’ll need to choose the right investment to have any success. A Charleston property manager can help you make the right choice. You need to think like a tenant when you buy, and purchase something that will appeal to your best tenants, bring in the most rents, and provide an opportunity to earn ROI as quickly and reliably as possible. 

We recommend a diverse portfolio of investment when you’re choosing what to buy. Let’s talk about your investment goals and your plans for the future. We can make some suggestions that will meet your unique needs, and talk about the support we can provide when it comes to leasing, managing, and maintaining your investment property. 

Contact us at Meridian Residential Group. We’d be glad to help.

Meridian Residential Group in North Charleston provides both single-family and multi-family property management in the Charleston, SC area, including in North Charleston, Summerville, Goose Creek, and Moncks Corner, among other cities.