When you decide it’s time to invest in residential real estate, you want to get the most money out of your investments.
In an ever-changing market, it is difficult to say that any particular type of property is a “sure thing”.
That being said, we think there is a lot of benefit to investing in multi-family properties, especially in large cities or urban areas.
Before we get too deep into this, what is a multi-family property?
A multi-family property is any property that has the space for more than one family. Examples of multi-family properties are duplexes, triplexes, four-plexes. The bigger the property, the more potential for income. But as always, paired with higher income potential is a higher risk.
Let’s talk about why you should invest in multi-family properties.
Why Investing In Multi-Family Properties Is Right For You
Consistent Cash Flow
Who among us can argue with consistent cash flow?
When you invest in multi-family properties, you are investing in homes where tenants pay monthly rent. This monthly rent comes right to you!
Of course, you don’t get to keep all of this rent because you have to take care of the facilities, repairs, etc. However, we can’t deny that there is nothing more consistent than housing rent.
Aside from the occasional repair, your multi-family property can become a fairly passive income for you.
One thing you would need to do is hire a property manager to take care of the day-to-day stuff on your behalf. But once you do this, you can take your hands off the property and let it work for you.
We talk a lot about diversifying your real estate portfolio and we will say it again here. If done correctly, multi-family properties are a great way to diversify your portfolio. Just talk to your investment advisor and do some research on properties that would work for you.
Less Investment Risk
When you invest in single-family units or homes, you really depend on that family to bring in the cash flow by paying their rent. But just like in commercial real estate, by investing in a property with multiple tenants, you float that investment risk on every tenant. It is far less likely that you will end up with no one in any of your units.
Simplicity of Loans
When you invest in multiple single-family homes, you take out individual loans for each investment.
But when you invest in a multi-family property, you only take out one loan.
It is much easier to keep track of one loan than multiple loans.
Multi-family properties have the benefits of multiple properties with the simplicity of one location and one loan. They are a great way to create passive income for yourself and to diversify your portfolio.
Do you have questions about investing in multifamily properties? Please let me know! I would love to discuss this with you further!