Multi-family real estate can be a great option for property investors who wish to build a relatively large portfolio of rental units.
3 REASONS TO INVEST IN MULTI-FAMILY PROPERTIES
Owning rental real estate can be a smart way to diversify your investment portfolio and generate steady income.
A multi-family property can multiply your income with only incremental added cost.
Multi-family rentals are typically easier to finance compound returns more quickly and tend to benefit from economies of scale.
1. More Expensive, but Easier to Finance
Securing a loan for a single-family property seems like it would be a lot easier than trying to raise money for a million-dollar complex, although because a multi-family property consistently generates a stronger monthly cash flow, it is more likely to be approved by a lender or bank for a loan than the traditional single family home.
2. Growing a Real Estate Portfolio Takes Less Time
For property investors wanting to build a relatively large portfolio of rental units, acquisition of a 20 unit apartment building can be much easier, faster, and more time efficient than purchasing 20 different single-family homes.
3. Property Management Services Makes More Financial Sense
Typically, a property management service is paid a percentage of the monthly income that is generated by the property, and their duties can include finding and screening tenants, collecting rent payments, handling evictions, and maintaining the property. Investors owning one or two single-family homes may find it out of reach financially because it can cost them more than the profit they could realize on their own. Whereas, an investor owning multiple properties such as multi-family units have the ability to equalize the expense over more properties, increasing their income per unit.