To be more specific, the “cost/door” for a single family property is easily in the $225,000. to $250,000. price range. A four-plex will typically sell for perhaps $420,000. in the Hamilton area, or a an 8-unit apartment for $650,000. in the same city. Comparably, the cost/door for the three types will be $225,000. $105,000., and $81,000. Similarly, from an income perspective, the single family unit would generate about $1,600/month, whereas the apartments will rent for about $1,100/month. Quick math suggests that income/investment for the single family will be about 8.5% annually, whereas the apartments will be 12.5% for the four-plex, and 16.3% for the eight-plex.
Additionally, the cost of a vacancy is reduced with a multi-plex; in the above examples, a single family vacancy generates no income but 100% of the expenses, whereas in the multi-plex examples, there are either three or seven other units to cover expenses in the event of a vacancy.
While the investment required to acquire multi-plex properties is higher, and the financing will be at commercial rates which are somewhat higher, the investment per unit will be lower, and the financial risk of vacancies is also significantly reduced when compared to single family properties.