7 Advantages of Multifamily Real Estate Investing
- January 4, 2021
For tenants, multifamily housing is one of the most affordable and convenient options when it comes to housing. It is well-suited to virtually everyone from families to working folks to retirees. For investors, multifamily properties are just as beneficial. Multifamily is a high-preference opportunity, and one that can yield strong returns. What are the major advantages of multifamily real estate investing?
7 Reasons to Invest in Multifamily Real Estate
Multifamily properties are those that contain two or more units within a single building. Apartment buildings and duplexes are two types of multifamily housing. Now, the advantages of multifamily real estate investing include:
- Steady – and High – Demand
We have demand that is both steady and quite high. This is not going to change anytime soon; multi family housing is perhaps the single most sought-after form of housing. Again, this is due to factors including affordability and suitability for people at all stages of life.
- Cash Flow
Thanks to high demand, you will have a high occupancy rate, particularly in desirable areas. You can maximize cash flow by investing in multi housing properties in diverse markets in order to get multiple income streams flowing.
- Accessible Investment
Dollar for dollar, the cost of multifamily property construction is lower than other real estate asset classes. This carries over into investment, making it both cost-effective and low risk. While no investment is “risk-free,” this comes as close as you can get. Further, mortgage rates are typically much more favorable, helping you cut costs over the long run.
- Tax Breaks
Shortage of housing is a pressing concern in many areas; to reward you for providing housing for residents, governments extend tax incentives that reduce cost and enable you to direct more revenue to your wallet.
- Convenient Management
With multifamily housing, you (or your property management firm) manages multiple units/tenants in a single building. This is logistically easier to manage than attending to units spread out across a region.
- High Appreciation
It may take time to start seeing positive cash flow, but they do hold (and build) value from the start. This increases over time; the appreciation rate for multifamily housing is higher than other real estate property types. With proper maintenance and upgrades when necessary, you can build move value.
- Low Risk
As mentioned, one of the advantages of multifamily real estate investing is that it carries a reduced level of risk. This is mitigated even further because risk is spread out over several units. For example, if you have a 10-unit building and two tenants move out, you have eight units generating income.
- Portfolio Development
Whether you are new to real estate investing or you want to get more serious, investing in multifamily housing allows you to jumpstart your portfolio.
Do you find the reasons to invest in multifamily real estate compelling? Contact Belmont Associates to learn more.