What Is SFH in Real Estate?

Posted Nov 11, 2023


In the realm of real estate, the term 'SFH' is an abbreviation for Single-Family Home. A Single-Family Home is a standalone house designed, usually constructed to house only one family, differing from multi-family homes or apartment buildings. 

These homes can be characterized by several key features:

Freestanding structure 

A defining characteristic of an SFH is that it is a detached structure and stands alone. The dwelling doesn’t share walls or common living spaces with adjacent housing units. Detached homes typically offer a greater degree of privacy and independence compared to attached or multi-family housing.

Private ownership 

SFHs can be owned by a single individual, family, or an investor/investment company. The owner has full control over the property and is responsible for the maintenance, landscaping, and any modifications or improvements to the home, unless otherwise specified in a rental agreement between the owner and a tenant. 

Yard or outdoor space 

An SFH often comes with a yard or outdoor space. This space can vary in size, but it provides a private outdoor area. 

Residential Rental Investment Market 

Single-family homes are a popular type of real estate investment to be used as rental property and account for about 35 percent of the 44 million rental units in the U.S. SFH real estate represents a significant and swiftly growing sector within the residential rental market. 

Real estate investors often choose to invest in SFHs for various reasons:

  • Steady Rental Income: Can provide a reliable source of rental income in certain markets. Many families and individuals prefer renting a whole house, which can lead to consistent occupancy and rental income.
  • Ease of Management: Managing an SFH can be more straightforward than managing larger multi-family properties or commercial real estate. It may involve dealing with fewer tenants and maintenance issues.
  • Appreciation Potential: Can appreciate in value over time, potentially leading to capital gains when the property is sold
  • Residential Neighborhoods: SFHs are often located in residential neighborhoods, which can offer stability and a sense of community, making them appealing to renters.
  • Diversification: Including SFHs in a real estate investment portfolio can provide diversification, spreading risk across different types of properties.
  • Exit Strategies: Offer flexibility when it comes to exit strategies. Investors can sell the property, continue renting it, or even use it for personal use in the future.

This material is for general information and educational purposes only. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions. It should also not be construed as advice meeting the particular investment needs of any investor.

Realized does not provide tax or legal advice. This material is not a substitute for seeking the advice of a qualified professional for your individual situation.

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