When it comes to real estate investment, there is more than one strategy that will make you a successful investor. That is why as investors you should be able to take risks and hope for the best outcome. Investing in multi-family properties can be a great way to make huge profits for investors although it has its bad sides too. In this article, you will get to know reasons why investing in a multi-family real estate is worth it.
#1. More expensive but a lot easier to finance
In most cases, if not all, large properties are very expensive to get and this can be a difficult task to take up from just the sight of it. What most people don’t know is that most banks tend to grant loans for buying a bigger property because they generate stronger cash flow by the end of every month. Multi-family properties have less risk of foreclosure because they have a lot of tenants, which prevents the property from being totally unoccupied at a period of time. This also brings in a continuous flow of cash for the landlord. Even if some tenants do not pay on time, there will most definitely be good tenants who will never let you down.
#2. Growing a portfolio takes less time
Have you ever thought of the chaos you will have if you buy over 15 different rental properties? If you buy for example a 20 unit apartment as opposed to 20 separate single apartments, it is easier to manage and maintain the property.
Having a lot of property means that you have to deal with several inspections and rent collection in different locations. In addition, you will have more loans and mortgages to pay off. You can avoid getting all this trouble by going for a multi-family property.
#3. You are in a position where property management makes financial sense
There are more property owners out there who do not just like managing their property on their own. A property manager gets to have a percentage of the income from a property every month. They get to deal with all the screening, collection of rent, managing and maintaining the property. Perhaps it is the best to do but most people get to enjoy this luxury when they have a multi-family property that fetches a good cash flow to pay off the property manager. Single family property owners, on the other hand, cannot afford to take on such expenses. They have a smaller portfolio bringing far less cash.
The Last Word
It is common practice for investors to own a collection of single-family properties but they can be difficult to manage. Multi-family properties are easy to maintain and they also have better financing opportunities. Furthermore, they also have quick growth. To make a decision on which property you want to own, look for the best that you will be able to take care of.