The Multiple Benefits of Multifamily Properties
If you’ve been studying multifamily properties for sale, you’ve likely found investments with great potential. Apartment buildings and duplexes can be found within in-demand neighborhoods, such as near public transportation and universities. Financing for these types of units are often based on earning potential rather than your personal credit, making them accessible to a wider audience. Consider some of the following additional benefits.
One advantage of multifamily properties versus single family homes is the ease of hiring an on-site manager and/or maintenance person. Potential renters who have had bad experiences in the past when trying to get repairs done may be more willing to rent knowing their technician lives steps away. An on-site manager can keep you informed of issues with residents and larger maintenance projects before any of these matters turn into bigger problems.
Many investors have been successful in buying older buildings and restoring these to their original glory. If you buy in the right market and don’t mind riding through potential economic storms, you may have a gem on your hands when you’re eventually ready to cash out. Others have taken commercial and industrial buildings and converted these into lofts. In a hot market, these lofts can rent out quite quickly, and although turnover may be a bit higher than other residential units, you can get a good price for them and keep them occupied.
The Bulk Rate Effect
Good, classic investment advice never goes out of style. Think: buy low, sell high. The price per square foot that you pay for multifamily properties is often less than that of single family homes, offering you a better deal. The less you pay for your property, the more potential you have for profit. It also gives you a break when vacancy is higher than you’d like it to be.
The Safety Net
Speaking of occupancy, if you own a single family investment home and it’s not rented, you’re dealing with a zero percent occupancy rate. If in turn, you purchase a 4-unit complex and three units are rented, you’re enjoying a much more favorable 75 percent occupancy. Take advantage of this downtime by renovating the unit, and when finished, feel free to bump up the price a bit. Who knows, maybe one of the other tenants will move into the fixed-up unit, and that’ll give you the chance to renovate another one.
Sold yet? Considering some of the benefits mentioned above, duplexes and apartment buildings can be wonderful additions to your income stream and asset portfolio.
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