Is Multifamily Real Estate Investing the Right Choice for You?

 

If you are one of those individuals who cannot withstand the high risk and volatile nature of the stock market, then commercial real estate investment can be a perfect choice! This type of investment provides you with an amazing opportunity to get actively involved in the growth of your capital. Multifamily real estate investing consists of different aspects that you need to consider. You can invest in a rental property if you are looking for an additional source of income along with a slow and gradual appreciation of the portfolio's value.   

Single-family and multifamily are the two types of residential rental properties. Single-family rental properties are those properties that have one available unit to rent. On the other hand, multifamily real estate consists of large apartment complexes with multiple rentable spaces. You can easily start with a small home portfolio and can even enjoy many benefits of multifamily investment properties. 

 

Let's take a look at the three reasons to invest in multifamily real estate:
 

1.     Easier to Finance  

 

You can notice in most cases that the cost to purchase an apartment building is usually higher than the cost to purchase a single-family home as an investment. Initially, you might think that taking a loan for a single-family property is relatively easier than raising money for a million-dollar complex. However, in reality, a multifamily property is more likely to get approved by a bank for a loan than any other home.

 

You can get easy bank loan approval for a multifamily property because it generates a strong cash flow every month. In addition, the possibility of the closure of an apartment building is not as high as a single-family rental. Thus, a multifamily real estate investing is less risky for a multifamily property lending institution and can even provide a competitive interest rate to the property owner. 

2.     It Takes Less time to Grow a Portfolio 

 

If you want to build a relatively large portfolio of rental units, multifamily real estate investing can be a great choice. For example, it is much easier and time-saving to own a 20-unit apartment building than to purchase 20 different single-family homes. 

 

If you are purchasing different single-family homes, you have to make a lot of effort in dealing with 20 different sellers and conducting inspections on 20 houses, each of them with a different address. 

3.     Greater Long-term Appreciation

 

           Multifamily real estate investing provides the benefit of long-term appreciation to the property owner. These properties have a greater possibility of increase in value over time when the cost of living and the cost of rent rises. In addition, if the owners properly maintain these properties, they have lesser chances of losing their value with time, which can also be a great way to protect your property against inflation. 

 

4.     Better Property Management 

 

          Some real estate investors do not manage their property independently and instead hire a multifamily real estate investing management company to manage their rental property's day-to-day operations. A property manager usually receives a percentage of a property's monthly income.  A property manager's duties include finding and screening tenants, collecting rent payments, handling evictions, and property maintenance.  

 

Wrap Up- 

 

          If you want to invest in real estate, owning a collection of rental properties is a good idea. Owning a multifamily real estate offers many advantages, including easy access and better financing opportunities such as competitive multifamily financing rates, the potential for quick growth in the rental property portfolio, and the convenience of hiring a property manager. There are many renowned lending institutions and online platforms that offer simple, fast, and reliable financing for the best customer experience.