Without a doubt, multifamily properties play a vital role in the real estate industry. Highly preferred among real estate investors, Multifamily properties ensure a lower vacancy rate due to the extremely high demand for rental units. Therefore, it is a fantastic option for anyone looking to diversify their real estate investment portfolio.
With so many types of properties to invest in, what separates multifamily properties from the rest? What are the benefits of investing in a multifamily property? We listed some of the advantages that make multifamily investing totally worth it;
Increased Cash Flow
The cash flow advantage is one of the main reasons why real estate investors consider putting their eggs in the multifamily basket. As mentioned above, multifamily properties are in high demand. This means you can expect a high occupancy rate on your property, especially in a strategic location.
If you’re looking to expand your investment portfolio, investing in multifamily real estate is a much faster way to grow than single-family rentals (which you would need to acquire one at a time). It also offers the opportunity to move toward commercial real estate investing as larger multifamily properties (those with five or more units) start to fall under commercial real estate, with even greater cash flow opportunities.
Multifamily properties are considered a relatively “safe” investment compared to other real estate investments. Don’t get us wrong, there are always risks involved when you invest in real estate. But the risks on multifamily properties are considerably lower than other types of property investment, even including single-family homes. The biggest risk involves the vacancy rate.
Since you are dealing with multiple separate tenants, the risk of a complete vacancy is relatively low. As long as you have done your research about the location beforehand and you market your property, you shouldn’t have to worry about that. When all else fails, the value of a multifamily property grows over time.
Investing in multifamily properties offers some pretty attractive tax benefits. You can deduct maintenance and operation costs, including utilities, property management fees, maintenance and repair expenses, insurance premiums, and any marketing costs.
Investing in a multifamily property is a great way to earn passive income. If you hire a property manager, you’ll have little day-to-day work to do on your multifamily investment property. This means you have more time to focus on your day job or next investment project.
When it comes to real estate investments, there are times when investors are unsure if they are ready to take on the challenge of owning a multifamily property. But this is truly one of the best decisions you could make, and there’s no better time than NOW to apply for a rental loan with First Equity Funding. Reach out and contact our team so we can help you take advantage of the market.