4 Reasons to Invest in Multi-family Properties

Real Estate

Real EstateResidential real estate investments can be in single-family or multifamily units. Each of these properties offers unique benefits. Here are reasons to invest in multifamily properties.

Economies of Scale

Multiple units that come under one roof provide economies of scale for several expenses. The price for maintenance, renovation, marketing, or insurance goes down when you’re dealing with multifamily units.

Easier to Finance

A multifamily building is more expensive than a single-family unit. Still, it’s often easier to get a multifamily construction loan at a lender like Bonneville Multifamily Capital than secure mortgages for many single-family homes.

Multiple units are less risky investments for lenders. The lending institutions can expect these properties to generate a consistent, strong, regular cash flow. There will be money to repay the loan even when some tenants move out or get late on rent.

Easier Property Management

Many people lack the time or the skills to manage real estate investments. Such investors need the services of experienced managers.

But hiring someone to manage your investment must make financial sense. Hiring an external manager makes economic sense when you own multifamily properties.

The property can afford the services of a manager. The professional handles the daily operations of the rentals and gets a percentage of the generated cash.

Faster Portfolio Growth

Are you looking forward to building a large portfolio of residential rental units? Multifamily properties will get you there faster than the single-family real estate.

Acquiring a multiple units building is easier and more efficient than buying several one-family units. For instance, compare purchasing a 10 unit apartment property to buying 10 different one-family houses.

Dealing with one seller is easier than managing 10 sellers. And don’t forget about traveling to 10 different addresses. Also, consider the separate inspections and loans for each of the 10 single-family homes.

Both multiple units and single-family units can help you create your investment portfolio. However, each of these properties has their place. Consider your situation and choose a suitable investment vehicle.