WealthMultiplex vs House Calculator: Compare a Rental Investment to a Home Purchase
Trying to decide between buying a rental multiplex (duplex, triplex, quadruplex) or a single-family house? This calculator compares both options side by side: mortgage payment, net rental cash flow, and projected net worth over time. Adjust the assumptions to your market to see how rental income and tenant-funded principal paydown can affect your long-term wealth.
🏢 The rental multiplex
🏠 The single-family house
🏢 Multiplex — monthly results
🏠 House — monthly results
How this calculator works
The monthly mortgage payment is calculated with the standard amortization formula: M = P × r × (1+r)^n / ((1+r)^n − 1), where P is the loan principal, r the monthly interest rate, and n the total number of payments. For the multiplex, net monthly cash flow subtracts the mortgage payment, property tax, insurance/maintenance, and management fee (if any) from the effective rent (gross rent adjusted for vacancy). Projected net worth adds accumulated equity (property value minus remaining mortgage balance, both evolving over time) and, for the multiplex, the accumulated net cash flow over the years (positive or negative).
Worked example
Consider a 4-unit multiplex at $650,000 (20% down, 5.2% rate, 25-year amortization) renting at $1,300/month/unit with 5% vacancy and no external management, compared to a $500,000 house (same mortgage terms, 3.5%/yr appreciation).
| Item | Multiplex | House |
|---|---|---|
| Down payment | $130,000 | $100,000 |
| Monthly mortgage payment | ~$3,101 | ~$2,385 |
| Gross potential rent / month | $5,200 | n/a |
| Effective rent (after 5% vacancy) | $4,940 | n/a |
In this scenario, effective rent comfortably covers the multiplex's mortgage payment, generating positive cash flow that accumulates year after year — on top of equity built through appreciation and principal paydown. The house, by contrast, generates no offsetting income, but generally requires less management time and carries fewer operational risks (vacancy, rental repairs, tenant relations).
What to keep in mind
A multiplex can offer rental income and "forced appreciation" through principal paydown partly funded by tenants' rent. But it also comes with landlord responsibilities: tenant management, repairs, vacancy risk, and sometimes complex rental regulations. A single-family house, on the other hand, can appreciate over time without generating offsetting income, but generally requires less active involvement.
Frequently asked questions
Is a multiplex always a better investment than a house?
Not necessarily. A multiplex can generate rental income and benefit from principal paydown partly funded by tenants, but it comes with vacancy risk, landlord responsibilities, and often higher maintenance costs. A house has no offsetting rental income but generally requires less management. The better choice depends on your local market, risk tolerance, and available time.
How does the vacancy rate affect a multiplex's profitability?
The vacancy rate directly reduces gross rental income. For example, a 5% vacancy rate means that, on average, you only collect 95% of total potential rent over the year, which can turn a positive cash flow into a negative one if margins are tight.
Should I self-manage my multiplex or hire a property management company?
Self-management eliminates management fees (often around 8% of gross rents) but requires time and skills in tenant relations, maintenance, and rental law. A professional management company reduces your involvement but lowers net cash flow. This calculator lets you compare both scenarios.
Does this calculator account for all real multiplex costs?
No, this is a simplified, illustrative model for educational purposes. Real costs vary enormously by market, building age, needed renovations, local municipal taxes, and other factors. Consult a professional (accountant, financial planner, or real estate broker) before making a real decision.
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