It’s an age-old question for real estate investors in Atlanta and really, in any market: Should you invest in multi-family rental homes or single-family rental homes?
The answer to that question is going to depend largely on investment goals. What are you hoping to achieve in terms of cash flow, long-term appreciation, and equity? What kinds of tenants are you hoping to attract?
At Silas Frazier Realty, we successfully manage single-family homes as well as multi-family investments such as duplexes, triplexes, and small buildings with four to six units. When investors ask us for help in choosing the right investment property, we ask them to consider their investment goals, the existing tenant demand in Atlanta’s rental market, and their tolerance for risk, including vacancy risk.
We’d love to talk to you about your specific investment goals and market position. Until then, let’s take a look at whey Atlanta investors need to know about these two property types.
Single-Family Rentals in Atlanta
Single-family rentals are detached homes leased to individual tenants. These have long been a go-to for new investors or those focusing on residential areas.
- Pros of Investing in Single-Family Homes
One of the reasons we will steer investors towards single-family rentals is that they have broad tenant appeal. Single-family homes are in high demand among families, professionals who don’t love apartment life, and remote workers. Throughout Atlanta and especially in suburbs like Alpharetta, Marietta, and Decatur, these homes offer more space and privacy. They often have yards and private parking.
Atlanta’s single-family home prices have appreciated steadily. Neighborhoods in the BeltLine, East Atlanta, and West Midtown have seen prices go up, offering solid long-term appreciation. This is another benefit to single-family investments. Rents are often higher, too.
It’s also important to think about exit strategy. Selling a single-family home is typically easier than a multi-family property. You have a larger pool of potential buyers, both investors and primary homeowners.
When pricing is important, single-family homes offer lower barriers to entering the market. Residential prices have risen over the last few years, but it’s possible to buy a good investment property in the single-family market for around $300,000 when you know where to look.
- Challenges with Single-Family Home Investments
If you’re nervous about vacancy, single-family homes can feel risky. You’ve only got one unit to work with when you invest in a single-family home. Vacancy means 100% lost income. There’s no diversification of rental streams within the property.
Investors looking to grow a sizable portfolio may find this property type limiting. Managing eight single-family homes across the metro Atlanta market is more complex than managing two four-unit buildings in the same neighborhood.
There’s also maintenance. Each house has its own HVAC, roof, and plumbing system. Maintenance costs per unit are often higher than in multi-family setups.
Multi-Family Rentals in Atlanta
Multi-family properties include duplexes, triplexes, fourplexes, and larger apartment buildings. These offer multiple rental units under a single title. Let’s look at the rewards and challenges.
- Why Invest in Multi-Family Properties in Atlanta?
It starts with economy of scale for a lot of investors. Multi-family properties allow you to collect multiple rents from one location. This boosts cash flow and allows for cost efficiencies in management and maintenance. Hiring a property manager for a 6-unit building is more cost-effective than hiring one for six different rental homes. Also, repairs and inspections can be consolidated.
There’s often the potential for higher cash flow with multiple income streams. This is particularly true in high-demand areas like Midtown, Buckhead, and West End.
Many Atlanta real estate investors hold these multi-family rentals as part of their wealth-building strategy. These properties are better suited for value-add opportunities and forced appreciation via renovations or rent increases.
- Why You Would NOT Invest in Multi-Family Properties in Atlanta
One of the biggest challenges is cost. Buying even a small apartment building in Atlanta typically requires more capital. Properties in desirable areas can range from $800,000 to several million. If your finances are limited but you know you don’t want a single-family home, look for a duplex.
Multi-family loans come with stricter terms, especially for properties with five or more units. Lenders will often look at the property’s income rather than your personal finances.
Atlanta has varying zoning laws and building codes. Multi-family projects often require navigating permits, inspections, and potential rezoning if you’re considering expansions.
Atlanta-Specific Considerations
When comparing single-family and multi-family opportunities, Atlanta offers some unique market dynamics that might influence your decision.
- Neighborhood Shifts
Many of Atlanta’s neighborhoods, such as Westview, Kirkwood, and Edgewood, are undergoing rapid transformation. These areas may offer older duplexes and triplexes that can be renovated for strong returns. Single-family homes in these same areas may also appreciate rapidly but may be more competitive.
- Zoning Shifts and ADUs
Atlanta’s new zoning laws are increasingly friendly to accessory dwelling units (ADUs), which makes single-family homes more versatile. Investors could potentially add an additional income unit to a single-family lot, blending single-family ownership with multi-unit income.
- Short-Term and Mid-Term Rental Demand
Due to its role as a transportation hub and convention city, Atlanta has strong short-term rental demand. Single-family homes may perform better in this space due to privacy and neighborhood appeal, but multi-family properties near Downtown or hospitals can thrive in the mid-term rental market targeting travel nurses or business travelers.
Both single-family and multi-family rentals can be strong investments in Atlanta’s growing real estate market. There’s no one-size-fits-all answer, but understanding your strategy, budget, and desired level of involvement is critical to choosing the right asset type.
Atlanta continues to grow in both population and investor interest. Whether you’re drawn to the stability and simplicity of single-family homes in the suburbs or the high-yield potential of a multi-family building, Atlanta provides some exciting opportunities for smart investors, and we’d love to talk about those opportunities with you.
We’re following the market, we’re encouraging flexibility, and we’re ready to show you how to diversify your existing portfolio to perhaps include both property types.
Contact our team at Silas Frazier Realty. We serve rental property owners in Atlanta, Snellville, Stone Mountain, Lilburn, Conyers, Smyrna, Marietta, Lithonia, Jonesboro, McDonough, Vinings, Brookhaven, and Tucker.
