The Advantages of Multi-Family Investment Properties

You’re building your expertise in real estate investment, perhaps you’ve flipped a couple of house, or maybe even have a property or two that you own that you are renting out. So how do you take your real estate investment portfolio to the next level? Take a look at multi-family investment properties, these could be the next step to rocket your real estate investment to the next level, providing the foundation for even greater investments.

What Are Multi-Family Investment Properties?

A multi family property is a property that has more than one household, so this can be a large house that has been split into two or more apartments, or purpose built condos, apartment block or other multi occupancy dwelling.

There are multi family properties available on the market, and they can be bought outright, but other options might be to invest in a collective investment into a multi-family dwelling, where you own a share of the overall property investment. Alternatively you could by a single household dwelling which is large and has the scope for development, and turn it into a multi family property. Beware with this approach that there is demand for this type of low cost property in the area, and that you are likely to be able to get planning permission, indicated by whether there are other apartment buildings on the same block.

The Advantages of Multi-Family Investment Properties

There are several advantages to multi family investment properties worth considering. The first is when purchasing a single household dwelling and splitting it into multi family dwellings the overall value of the property should increase, as two or more apartments tend to hold more value than a single dwelling of the same floor space.

Also if you’re doing renovation work, you will receive economies of scale by renovating several properties in one building, compared with renovating separate buildings, because the external work will be done only once and you may be able to get deals on sub contracting and materials by buying in bulk.

The main advantages though are once your properties are ready to be rented out. Essentially you will have multiple renters rather than just one, so should one of your renters vacate during the rental period, your costs are still covered by your other renters, whereas in a single family property suddenly all of your income has gone and you are in panic mode to quickly replace the tenant, perhaps compromising on references and checks.

Being able to split your commitments and costs between the dwelling units also means that should you wish to free up equity at any point you can sell one of more of the apartments in the block to free up that equity. Meanwhile your other sitting tenants keep your income healthy.

Any long term real estate investment portfolio isn’t complete and fully secure without some multi family real estate investments in it, they have distinct advantages over single family dwellings and can help to accelerate your investment growth.