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Multi-Family Home (Mehrfamilienhaus)

Buildings with multiple rental units

3 min readUpdated December 2024

A multi-family property (Mehrfamilienhaus) is a building with 3+ rental units owned by a single investor. It's a scalable investment strategy offering economies of scale and diversification.

Why Multi-Family Properties?

  • Diversified income: One vacancy doesn't eliminate all cashflow
  • Economies of scale: Lower per-unit management and maintenance costs
  • Full control: No HOA—you make all decisions
  • Better financing: Banks often give better terms for multi-family
  • Professional investment: Treated as commercial real estate with institutional terms

Real Example: 4-Unit Building

Multi-Family Building in Leipzig:

  • Purchase price:€900,000
  • 4 units at €1,500/month each:€6,000/month
  • Annual gross rent:€72,000
  • Gross yield:8.0%
  • Operating expenses (30%):−€21,600
  • Net yield:5.6%

Multi-Family vs. Single Condo

Single €450k Condo

  • One tenant at €1,800/month
  • Vacancy = 100% income loss
  • HOA fees = no control
  • Gross yield: 4.8%

4-Unit €900k Building

  • Four tenants at €1,500/month
  • Vacancy = 25% income loss
  • Full control over maintenance
  • Gross yield: 8.0%

Challenges of Multi-Family

  • Higher capital requirement: Need €180k+ down payment for €900k building
  • More management: Multiple tenants = more turnover and maintenance
  • All maintenance is yours: No HOA to split costs—you cover everything
  • Location limits: Harder to find multi-family in prime city centers

Who Should Consider Multi-Family?

Multi-family makes sense if you:
• Have €150k-300k equity available
• Want to scale beyond one property
• Can handle or hire property management
• Prioritize cashflow and yield over appreciation
• Are comfortable with active real estate investing

Model multi-family building returns

Related Terms

Condominium(Eigentumswohnung)

An Eigentumswohnung is individually owned apartment unit within a larger building. Owners share common areas and pay monthly fees (Hausgeld) for building maintenance.

Rental Yield(Mietrendite)

Rental yield measures annual rental income as a percentage of property value. Gross yield uses total rent; net yield subtracts operating expenses and taxes.