Question:  Should I be investing in single-family or multifamily properties in the future?

What is your goal?  Is it cash flow: appreciation: a combination of the two?  Then of course, what type of investor are you? Short term speculator or long term passive income investor?  

When the market was rapidly appreciating or even if it was appreciating at a steady pace then single family homes may be a better investment.  In such a scenario you're giving up cash flow completely and often adding to the property on a monthly basis because in an appreciation market you will rarely get any sort of cash flow: people are buying homes and the home rental market is usually not as good.  You hope to make your money by realizing the gain in appreciation. 

While this can work an investor has to be on top of the market trends because a change in the cycle can quickly diminish the return or make a home more difficult to sell. 

In a stale market like we are in now an investor can purchase a home, lease it and realize a small cash flow but you're still hoping for some king of appreciation to realize a solid return.

Small multifamily properties follow different market rules and serve a different purpose but any building up to 4 units does take on some of the characteristics of a single family home.  Small multifamily properties, in general, do not change hands as often as homes because there is a smaller pool of buyers for them and they are usually purchased for long term cash flow rather then short term price speculation.  It's rare that a family will buy a multifamily property to occupy. 

Where a single family home and multifamily property up to 4 units are similar is in financing.  Financing for both is in general similar or was similar.  In both cases a buyer can receive conventional residential financing with very similar interest rates.

But to get to the point.  If your goal is to create a stream of passive income then your more likely to achieve such a goal with a multifamily property then a house.  A multi-family's purpose as an investment is cash flow and not appreciation.  Of course appreciation is expected but it often depends on the rental rates because this is a business: as the business generates more revenue the value grows and vice-versa.

In the current market more people are renting because financing is difficult to obtain in it will be even more difficult in the next few years as the financing markets readjust.  Multifamily property prices have corrected as well.  they are down from the speculative heights. 

What is it that your are after in real estate: if it's cash flow then you're more likely to get it with a multifamily property. 

Other things to consider:

A single family home and multifamily are still different beasts.  In a fourplex you have more people to deal with, 4 kitchen vs. 1, at least double the amount of bathrooms and 4 heat-pumps, 4 water heater, more pipes and just more of everything so the risk increases.  Management is different as well.  A multifamily property is truly a business, much more so then a single family home.  

There is no easy answer to the question first posed.  It can only be answered through a thorough discussion of your goals and tolerances.  One of the better solutions is to have both types of properties. 

Call us if you would like to discuss your options.  We have direct and indirect experience with both types of investments over 10 years and we'll be glad to share what we learned.