There may be some investors out there who are struggling with this question of whether to place their hard earned money into a multi tenanted project, like a single building with multiple commercial units or stick to buildings that house only one tenant. Of course there are several factors to consider before taking the leap.

In theory, a multi-tenant setup like a shopping mall should give you more returns. However the reality is vastly different. Here are some questions you should answer before deciding.

How much time can you commit?

- Single tenant setups require less time to manage as there is only one tenant. The most you need to do is to collect the rent and speak to the tenant about various building maintenance work. In some cases, the rent will be transferred online so you don’t even have to travel there or meet the tenants.
- Multi tenanted properties require a lot of time to manage. This will be challenging if you have a full time job. Even if you hire a building manager, you will constantly need to make decisions about tenants and issues that arise from your many tenants, which include things like failure to pay rent, closing their shop for too long, terminating the contract without prior notice, damaging their unit and so on.

What is the level of risks you’re willing to take?

- Single tenanted properties are of course filled with more risks because there is only one tenant and you could lose all your income from rentals if that single tenant disappears, terminates the contract or the contract is not renewed. It may take some time to find a new tenant and your place could be empty for a long time.
- Multiple tenanted properties ensure more secure income as a loss of one tenant will only mean a small portion of the income is affected.

To lease for long term or short?

- Single tenants tend to rent for a longer period than multi-tenanted arrangements. A long term lease would mean you have a steady stream of income but it also means you’ll find it more difficult to raise the rent and this may lead to a depreciation or stagnation in your property’s overall value
- Multiple tenants usually lease for a shorter period of time for about 1 -5 years, subject to renewal. This opens up many opportunities for revision of rental rates and other details.

How easy is it to find tenants?

- Single tenanted building owners have a harder time finding tenants to replace previous ones as the reputation of the area and the building tends to cause only similar businesses to consider renting. Long term tenants also tend to renovate the building to suit their business, hence making it suitable for a specific field only. This narrows the field of potential tenants to a very few potential ones.
- Multiple tenanted buildings have less of that issue as the pool of possible tenants are wider as the building is not renovated too much and the space is smaller.