Multifamily investing is the practice of purchasing multifamily properties, such as condos, duplexes, apartment buildings, or other properties that have multiple spaces for rent. Since it has the potential to improve cash flow and increase net operating income, it’s a popular form of real estate investment.
If you are considering multifamily investing, you are not alone. There are lots of people who are doing this. In this blog, we’re going to take a look at a few reasons why multifamily properties may be right for you.
4 Reasons to Choose Multifamily Investing
Real estate investing is a big part of lots of investment portfolios. Especially if they are being maintained by an accredited investor. There are lots of reasons why you might want to purchase a multifamily property. However, it’s also important to note that you have to make other commitments when it comes to management, maintenance, and finances. Here are four reasons why you might wish to choose multifamily investing.
You wish to expand your portfolio
Real estate investing involves choosing the right investments as well as investing in diversified holdings as protection against uncertainty/risk in the future. This means that you need to explore a variety of asset classes. Expanding your investment portfolio is critical for your success- if real estate investment is your passion.
Keep in mind that investing is either active or passive. Purchasing a multifamily property is an active investment. This means that purchasing this type of property means that you are now responsible for overseeing/managing the property. In addition, you must acquire and maintain tenants. Also, you will be responsible for paying taxes on the property.
That being said, you may gain a better ROI when purchasing a multifamily property versus other passive forms of investing.
You wish to generate additional income
If you are looking for a manageable way to increase your recurring revenues and your net operating income, a multifamily property may be right for you. This is because these properties have more rental units for you to bring to market.
Plus, real estate property tends to appreciate and increase in value. Which gives you an added windfall if you sell them. Many times, the gains on multifamily properties outpace those made on single-family residences.
Of course, you must understand property values/residential trends in the area you’re looking at purchasing in to find out how much profit you could potentially make.
Timing is right
In some cases, a great real estate investment may fall into your lap even if you’ve never thought about how to purchase a multi-family property or thought about being a landlord to more than one tenant.
If you find an opportunity that’s too good to pass up, you’ll want to take a look at the local market, including cap rates, market trends, and vacancy rates. Additionally, you must discuss the opportunity with a financial advisor, knowledgeable agent, and investor. They can help you review the situation to help you determine if the timing is right.
You wish to decrease living expenses
Many landlords who own smaller multifamily properties are also interested in cutting back on their living expenses. You can save money on your own rental/mortgage costs by moving into one of your units. This leverages the income from the other units to pay for your own and can be quite lucrative if you can find an affordable property in an area you like.
Multifamily investing is a wonderful way to grow your portfolio and provide you with additional income. Contact Achieve Capital Advisors to learn more about investing in multifamily properties.