WHY? Why should you invest in multifamily real estate? With all the many benefits, here are my favorite.
1. Vacancy; In a multi-unit apartment, when you have someone move out, you still have multiple other tenants paying the expenses and mortgage. Thus, giving you peace-of-mind, and adequate time to renovate, “turn” your unit for the next tenant.
2. Multiple Streams of Income; You thought rent was the only source of income? What about a laundry facility? What about getting reimbursed for utilities? What about covered parking? All of these are possible, and are opportunities to make your property cash flow more!
3. Valuation; When it comes to a SFH, If Sally payed $50K over asking, just because she liked the color of the house, now all the houses similar to that one, will sell for a similar amount. Well, in Multifamily Real Estate, since it is considered a business, the most common approach to valuation, is how profitable the property was, not by the looks, or not by the comparable sales in the area.
4. Taxes; I wont get into the nitty-gritty about this subject, however, I will say, the tax benefits are insanely beneficial, no matter where you, as an investor, stand!
5. Scalability!; Trying to scale in the Single Family game, is extraordinarily difficult. To buy one unit, you need to get it financed, insured, inspected, appraised. All of that work, for one…single…unit (source of income). When it comes to multifamily, all you need is one property, with multiple units (sources of income). 100 units can get financed, insured, appraised, inspected, etc. As you can see, you can 100x your portfolio, in the same amount of time.
