3 Reasons to invest in Multi-Family Real Estate
The risks of investing in Stocks VS Real Estate
March 29, 2022
Real Estate Investment is one alternative in saving money if you want to avoid the volatility of investing in the stock market. The good thing about real estate is that there are a lot of ways to have a passive income. Other real estate investors have also made millions of dollars from house flipping or purchasing properties that are in disrepair for cents on the dollar and renovating them to later sell them to a new owner.
Rental property investing is the preferred investment strategy for investors who want an additional source of monthly income along with a slow but steady appreciation in the value of their portfolio. When it comes to residential real estate, there are two main types of properties that one can invest in: single-family and multi-family. Multi-family investment is a type of investment where buildings have more than one rentable space as opposed to a single rentable space.
1. More Expensive, but a Lot Easier to Finance The cost of acquiring a building is a lot more expensive than acquiring a stand alone home. With this in mind, you probably think that it’s impossible, but it can actually be loaned to a bank with a fast process approval. Why? Because multi-family real estate consistently generates a flow of income. Also, the foreclosure of a single family home is more likely to be common than a building. All of this equates to a less risky investment for a lending institution and can also result in a more competitive interest rate for the property owner.
2. Growing a Portfolio Takes Less Time Investors who would want to grow their portfolio with a large number of units should definitely invest in a multi-family real estate investment. Imagine, acquiring a 20 unit apartment building is much easier than acquiring 20 single family houses. Additionally, in some cases, this route would also require an investor to open 20 separate loans for each property. All of this headache could be avoided by simply purchasing one property with 20 units.
3. You're in a Position in Which Property Management Makes Financial Sense When owning an apartment building, it’s only natural for you to hire a property manager. This would save you from headaches from finding the tenants to doing transactions with them with the rent payment and other things. These are the things that you, as a multi-family investor, could enjoy because a single home owner investor do not have the luxury of doing such things.
Rental property investing is the preferred investment strategy for investors who want an additional source of monthly income along with a slow but steady appreciation in the value of their portfolio. When it comes to residential real estate, there are two main types of properties that one can invest in: single-family and multi-family. Multi-family investment is a type of investment where buildings have more than one rentable space as opposed to a single rentable space.
1. More Expensive, but a Lot Easier to Finance The cost of acquiring a building is a lot more expensive than acquiring a stand alone home. With this in mind, you probably think that it’s impossible, but it can actually be loaned to a bank with a fast process approval. Why? Because multi-family real estate consistently generates a flow of income. Also, the foreclosure of a single family home is more likely to be common than a building. All of this equates to a less risky investment for a lending institution and can also result in a more competitive interest rate for the property owner.
2. Growing a Portfolio Takes Less Time Investors who would want to grow their portfolio with a large number of units should definitely invest in a multi-family real estate investment. Imagine, acquiring a 20 unit apartment building is much easier than acquiring 20 single family houses. Additionally, in some cases, this route would also require an investor to open 20 separate loans for each property. All of this headache could be avoided by simply purchasing one property with 20 units.
3. You're in a Position in Which Property Management Makes Financial Sense When owning an apartment building, it’s only natural for you to hire a property manager. This would save you from headaches from finding the tenants to doing transactions with them with the rent payment and other things. These are the things that you, as a multi-family investor, could enjoy because a single home owner investor do not have the luxury of doing such things.
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