Single-family vs. multifamily homes: What’s the difference?

The difference between single-family and multifamily homes is simple enough: One has one living unit, while the other has multiple living units. However, the differences go further than that.

Read on to learn how the two property types differ across return potential, required upkeep, financing options, and more.

Single-family and multifamily: Defined

First, let’s define single-family and multifamily homes.

What is a single-family home?

A single-family home is a residential property designed for one household. It’s an independent structure with its own entrance, utilities, and land parcel.

Single-family homes are ideal for families or individuals who prefer the privacy benefits of not having to share living space with others and want complete control over their home. They also can be suitable investment properties for aspiring landlords who want to rent them out.

What is a multifamily home?

A multifamily home is a property with more than one living unit. This could be anything from a duplex to a large apartment complex.

Generally, buildings with two to four living units are considered residential multifamily, and anything with five or more units is a commercial multifamily property. This distinction can affect zoning and financing options.   

Multifamily homes are almost always occupied by renters. However, owners may live in one unit while renting out the others, a practice known as house hacking. Either way, investing in multifamily homes can provide regular cash flow and long-term appreciation.

Single-family vs. multifamily: What are the key differences?

Consider the key differences between single-family and multifamily homes:

Zoning

Local zoning laws limit where certain property types can be located. For example, many cities designate some areas for single-family homes and others for commercial buildings. Before buying a property, ensure its zoning aligns with your intended use.

Financing

From a lender’s perspective, single-family and multifamily properties carry different levels of risk. As a result, your borrowing options depend on the property type.

For example, a conventional loan can finance a single-family home or a multifamily home with up to four units. If you choose to occupy one of the units in a building with two to four units, you may even qualify for owner-occupied financing, including government-backed FHA and VA loans.

However, commercial multifamily buildings require a commercial loan. You typically need a larger down payment and will pay a higher mortgage rate because commercial loans are perceived as a riskier investment. 

So, before seeking financing, determine how you intend to use the property. 

Rental income potential

The potential rental income of a single-family vs. multifamily investment varies by market and property. Multifamily homes come with multiple income streams – one for each tenant. Single-family homes rely on one tenant, which can lead to higher vacancy costs during turnovers.

To estimate rental income, analyze similar rentals nearby along with local vacancy rates. From there, you can subtract your expected operating expenses to estimate net operating income (NOI) and return on investment (ROI). 

Resale value

Resale values for single-family and multifamily homes also vary by market and property. Multifamily homes generally sell for because they’re larger structures and have the potential to generate more income.

Single-family homes benefit from a larger buyer pool, which may allow you to sell your property faster. In July 2025, there were 3.64 million single-family home sales, with listed homes taking a median of 58 days to sell.

Maintenance and upkeep

When you buy a single-family home, upkeep is limited to one living unit. With multifamily homes, you’re responsible for maintaining multiple units and shared spaces, which can take significantly more time and resources.

That’s why many multifamily owners hire companies that manage rental properties to handle day-to-day maintenance, especially with larger buildings or complexes. In some cases, a homeowners association or community association will handle maintenance for shared areas.

Common fees

Different property types may incur other fees. For example, if you buy a multifamily home, you may be responsible for more property management, parking, and trash service fees. This is because multifamily properties are more likely to require hiring a dedicated property manager.

Should I buy a single-family or a multifamily home?

Before buying a single-family or multifamily home, consider your financial goals and lifestyle. Ask yourself these questions:

• Will I be occupying the property full-time or part-time?
• What is my real estate strategy?
• Will I be managing the property myself or hiring help?
• How will I be financing the purchase of the property?
• Do I want to maximize economic occupancy or reserve the property for personal use at times?

Your answers will help determine whether a single-family or multifamily home is best for you.

FAQ

Here are answers to frequently asked questions on single-family and multifamily homes:

Can a multifamily home qualify as a primary residence?

Yes, if you live in one of the units. This is a popular beginner investing strategy called house hacking.

Which houses sell faster, single-family or multifamily?

Single-family homes tend to sell faster than multifamily homes because there’s a larger pool of buyers.

What is the 1% rule for multifamily homes?

The 1% rule states that a multifamily home’s monthly rental income must be at least 1% of its purchase price for the owner to break even.

Can I live in one unit of a multifamily home?

Yes, you can. This is called house hacking.

The bottom line: Consider your investment

Ultimately, choosing between a single-family and multifamily home depends on your goals, lifestyle, and investment strategy.

Single-family homes can provide simplicity and a faster resale. At the same time, multifamily properties can generate higher cash flow and long-term appreciation.

Before deciding, think about how you’ll use the property, how you’ll manage upkeep, and what financing you qualify for.

Still not sure which option is best? A Home Loan Expert at Rocket Mortgage^® can walk you through your financing choices and help you find the right loan for your needs. Connect with one today to take the next step toward your real estate goals.

This article is for informational purposes only, and is not a substitute for professional advice from a medical provider, licensed attorney, financial advisor, or tax professional. Consumers should independently verify any service mentioned will meet their needs.