When most people think of real estate investment, they picture a single home. However, as many investors have found, putting money into multi-family real estate can be an even better way to bring in cash.
What is multi-family real estate?
Multi-family real estate is a type of residential housing in which more than one unit is used as a residence while also being contained within one building or complex. The most common form of multi-family real estate is apartment buildings. These typically include several units, sometimes hundreds, either together in the same building or laid out in the same complex. Other forms include condominiums, townhouses and duplexes.
What are the benefits of multi-family real estate?
For investors, the benefits of multi-family real estate revolve around simplicity. Instead of owning two separate properties that are far away from each other and renting them out to tenants, investors can receive the advanced income of more than one tenant while still only having to deal with one property or area. This means the improved cash flow of multiple tenants without the headache of different properties to maintain, or, at the very least, different properties in faraway locations.
Multi-family properties also tend to be less popular among investors than single-family real estate, meaning less competition. This can result in lower selling prices and less hassle in finding quality properties.
Things to keep in mind
Multiple housing units mean multiple tenants, so investors should keep in mind that whatever problems come from having one tenant will be multiplied. The fact that an investor is dealing with multiple tenants means it may be a good idea to start out small before rushing into an expansive apartment complex purchase.
A good first step for beginners is to purchase a duplex, allowing them to get the hang of multi-family real estate without the stress that numerous tenants can result in.
Finding multi-family real estate
As with any kind of real estate investment, finding quality properties is half the battle. This is why investors of all types turn to property auctions, as this not only brings numerous properties together, it streamlines the purchase process and puts buyers on an even playing field with one another.
