October 28, 2025 • General
If you’re considering commercial real estate, one of the first choices you’ll make is whether to buy a single-tenant property or a multi-tenant property. Both can be great investments—but they perform very differently when it comes to risk, cash flow, and day-to-day involvement. The key is choosing the one that fits your long-term goals and your comfort level as an investor.
What Is a Single-Tenant Property?
This is a building leased to one business—think banks, medical clinics, pharmacies, or restaurants. A lot of these tenants sign longer-term leases and may even handle their own maintenance.
Why Investors Like Them
- Steady income: When the tenant is strong and on a long lease, it’s predictable and stress-free.
- Hands-off ownership: Many single-tenant properties are triple-net (NNN), meaning the tenant pays taxes, insurance, and maintenance.
- Easier to manage: One tenant, one lease, one point of contact.
What to Watch Out For
- Vacancy risk: If that one tenant leaves, your income goes to zero overnight.
- Limited flexibility: With only one tenant, you can’t raise rents by reconfiguring space or adding new tenants.
- Market dependency: The success of your property is tied to one business and one industry.
What Is a Multi-Tenant Property?
These include shopping centers, office buildings, or flex industrial spaces with multiple tenants under one roof.
Why Investors Like Them
- Diversified income: If one tenant moves out, you still have others paying rent.
- More upside: You can add value by filling vacancies, adjusting rents, or making improvements.
- Tenant synergy: Certain businesses actually perform better when located near each other—like cell phone providers, loan companies, or restaurants.
What to Watch Out For
- More management: More tenants mean more leases, more calls, and more moving parts.
- Higher operating costs: You’re responsible for maintaining shared areas like parking lots, lighting, landscaping, and roofs.
- Complex leases: CAM fees, renewals, and tenant build-outs require proper oversight.
Which One Is Right for You?
If You Want… |
Consider… |
|---|---|
Low involvement and predictable income |
Single-Tenant |
More control and long-term upside |
Multi-Tenant |
Less risk if one tenant leaves |
Multi-Tenant |
A hands-off, long-term lease |
Single-Tenant |
There’s no one-size-fits-all answer. Some investors start with single-tenant properties to keep things simple, then move into multi-tenant assets as they build confidence and equity. Others prefer the growth potential that comes from managing multiple tenants from day one.
Final Thoughts
At the end of the day, the question is not which is better overall, but which is better for your strategy. Single-tenant properties offer stability and simplicity. Multi-tenant properties offer flexibility and higher returns—but they require more involvement.
At Wellborn Real Estate, we help investors in the Amarillo area evaluate both types of opportunities and match them with the right strategy for their long-term goals. Whether you want passive income or value-add potential, our team can guide you through the process so your investment works for you—not the other way around.