A fourplex, also known as a quadplex, is a multifamily property made up of four individual units connected under one roof. Fourplexes are often bought as investment properties in which the owner lives on-site and uses the three other units as income rental properties. Fourplex buyers can usually secure a residential mortgage loan to purchase their property, which offers better rates than a commercial loan.

A fourplex has the potential to generate the same rental income as four separate rental properties while offering the owner tax benefits and allowing them to offset the cost of their mortgage. However, a fourplex is not a passive form of income because the on-site owner is responsible for managing the building and dealing with tenants. 

Here is an overview of some of the potential advantages of purchasing a fourplex. 

1. __Immediate cash flow opportunities__: A fourplex can offer the same cash flow opportunities as four single-family home investment properties, three if the owner lives on-site. Fourplexes also have lower property taxes than four separate rental properties, making fourplexes a sound investment with good financial returns.
2. __Streamlined management__: Having four individual connected units rental can help streamline property management. In comparison with owning multiple single-family properties, fourplex owners can consolidate building tasks like pest control, maintenance, and landscaping.
3. __Less risk with vacancy__: If a fourplex owner loses a tenant, they will be losing 25 percent of their rental income which is a smaller risk than a single-family home or duplex property owner, who would be losing 100 percent of their rental income. 
4. __More advantages with financing__: A fourplex is the largest property type that an owner can invest in using a residential property loan. Other multi-family homes that allow residential property loans are duplexes or triplexes, but any complexes that have five units or more are considered [commercial properties](https://www.masterclass.com/articles/what-is-commercial-real-estate). Fourplexes also offer lower down payment rates with an FHA loan. 
5. __Potential tax benefits__: Fourplex owners are also eligible for tax breaks on all expenses incurred by their fourplex living units, with the exception of the unit in which the owner is living.
6. __Good introduction to real estate investment__: Owning a fourplex is often an entry to real estate investing. This multi-unit dwelling has the potential to be a reliable income property with a strong rate of return because of its high cash flow potential and financing options. 

While there are many potential advantages to investing in a fourplex, there are also some possible disadvantages. Here is an overview of some of them. 

1. __Turnover__: Starter living spaces like fourplex units usually have a greater potential for tenant turnover than single-family or duplex properties. Once the market allows, your tenants may be more likely to move into a single-family property. 
2. __Hands-on management__: Management companies usually manage tenant relations and building maintenance in larger residential properties. If you own a fourplex, you are responsible for managing your building and sourcing tenants when vacancies arise. If you live on-site, this will likely require you to be very hands-on as a building manager because you and your tenants live under the same roof. If you’re looking for a more passive investment, a fourplex might not be for you. 
3. __Desirability__: Fourplex buildings are typically on land the same size as a single-family home, meaning that tenants have only a fraction of the space. Fourplex owners may struggle to keep all units occupied in certain markets where families are looking for long-term properties, rather than starter residences. 

All you need is a [MasterClass Annual Membership](https://www.masterclass.com) and our exclusive video lessons from prolific entrepreneur Robert Reffkin, the founder and CEO of the real estate technology company Compass. With Robert’s help, you’ll learn all about the intricacies of buying a home, from securing a mortgage to hiring an agent to tips for putting your own place on the market. 
Owning a fourplex can be advantageous for people looking to get started in real estate investing due to their cash flow potential and financing options.


Owning a fourplex can be advantageous for people looking to get started in real estate investing due to their cash flow potential and financing options.


Guide to Fourplexes: The Pros and Cons of Owning a Fourplex

A fourplex, also known as a quadplex, is a multifamily property made up of four individual units connected under one roof. Fourplexes are often bought as investment properties in which the owner lives on-site and uses the three other units as income rental properties. Fourplex buyers can usually secure a residential mortgage loan to purchase their property, which offers better rates than a commercial loan.A fourplex has the potential to generate the same rental income as four separate rental properties while offering the owner tax benefits and allowing them to offset the cost of their mortgage. However, a fourplex is not a passive form of income because the on-site owner is responsible for managing the building and dealing with tenants.

What Is a Fourplex?

Here is an overview of some of the potential advantages of purchasing a fourplex. <ol class="mc-m-4"><li class="mc-my-4"> 1. Immediate cash flow opportunities: A fourplex can offer the same cash flow opportunities as four single-family home investment properties, three if the owner lives on-site. Fourplexes also have lower property taxes than four separate rental properties, making fourplexes a sound investment with good financial returns. </li><li class="mc-my-4"> 2. Streamlined management: Having four individual connected units rental can help streamline property management. In comparison with owning multiple single-family properties, fourplex owners can consolidate building tasks like pest control, maintenance, and landscaping. </li><li class="mc-my-4"> 3. Less risk with vacancy: If a fourplex owner loses a tenant, they will be losing 25 percent of their rental income which is a smaller risk than a single-family home or duplex property owner, who would be losing 100 percent of their rental income. </li><li class="mc-my-4"> 4. More advantages with financing: A fourplex is the largest property type that an owner can invest in using a residential property loan. Other multi-family homes that allow residential property loans are duplexes or triplexes, but any complexes that have five units or more are considered <a href='https://www.masterclass.com/articles/what-is-commercial-real-estate' target='_self' class='mc-text--link' data-mc-segment-trigger='true' data-mc-segment-event-type='Article Page Click' data-event-obj='{"textTag":"p","href":"https://www.masterclass.com/articles/what-is-commercial-real-estate","linkCopy":"commercial properties","category":null}'>commercial properties</a>. Fourplexes also offer lower down payment rates with an FHA loan. </li><li class="mc-my-4"> 5. Potential tax benefits: Fourplex owners are also eligible for tax breaks on all expenses incurred by their fourplex living units, with the exception of the unit in which the owner is living. </li><li class="mc-my-4"> 6. Good introduction to real estate investment: Owning a fourplex is often an entry to real estate investing. This multi-unit dwelling has the potential to be a reliable income property with a strong rate of return because of its high cash flow potential and financing options. </li></ol>

What Are the Advantages of Owning a Fourplex?

While there are many potential advantages to investing in a fourplex, there are also some possible disadvantages. Here is an overview of some of them. <ol class="mc-m-4"><li class="mc-my-4"> 1. Turnover: Starter living spaces like fourplex units usually have a greater potential for tenant turnover than single-family or duplex properties. Once the market allows, your tenants may be more likely to move into a single-family property. </li><li class="mc-my-4"> 2. Hands-on management: Management companies usually manage tenant relations and building maintenance in larger residential properties. If you own a fourplex, you are responsible for managing your building and sourcing tenants when vacancies arise. If you live on-site, this will likely require you to be very hands-on as a building manager because you and your tenants live under the same roof. If you’re looking for a more passive investment, a fourplex might not be for you. </li><li class="mc-my-4"> 3. Desirability: Fourplex buildings are typically on land the same size as a single-family home, meaning that tenants have only a fraction of the space. Fourplex owners may struggle to keep all units occupied in certain markets where families are looking for long-term properties, rather than starter residences. </li></ol>

What Are the Disadvantages of Owning a Fourplex?

All you need is a <a href='https://www.masterclass.com' target='_self' class='mc-text--link' data-mc-segment-trigger='true' data-mc-segment-event-type='Article Page Click' data-event-obj='{"textTag":"p","href":"https://www.masterclass.com","linkCopy":"MasterClass Annual Membership","category":null}'>MasterClass Annual Membership</a> and our exclusive video lessons from prolific entrepreneur Robert Reffkin, the founder and CEO of the real estate technology company Compass. With Robert’s help, you’ll learn all about the intricacies of buying a home, from securing a mortgage to hiring an agent to tips for putting your own place on the market.

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Owning a fourplex can be advantageous for people looking to get started in real estate investing due to their cash flow potential and financing options.