Investing in multifamily real estate always pays off. Multifamilly investments are thought to be an ideal choice for investors and individuals who want to enjoy a good passive income without any effort. Multifamily investments provide you with a number of benefits you can‘t get with single family properties. But before we go any further into the advantages of investing in multifamily properties, let’s have a look at what is a multifamily real estate investment.
Multidwelling unit or multifamily property is a structure or building that is designed to house many different families in separate units. Apartment building is the most common example of multifamily property. Duplexes, townhouses and quadruplexes also fall within multifamily housing category. Sometimes units in a MDU (Multidwelling Unit) are condominiums, where usually the units are acquired individually. The inhabitants living in multifamily properties have limited privacy as they have to use one common lift, stairs or front entrance. The opportunities are endless for investors to make the most of multifamily real estate investments. They can raise capital through real estate crowdfunding to buy a multifamily building. The following are one of the key benefits of multifamily investments:
House Hacking
House hacking is one of the biggest benefits of investing in multifamily housing investment. You live in one of the units of your multifamily investment property and have tenants from other units of the property pay your expenses and mortgage. Multifamily buildings come in all sizes and shapes. 2 to 4 unit duplexes and triplexes fall within residential category, while 5 or higher unit apartment properties are considered commercial properties. Smaller 2 to 4 units are supposed to be an ideal choice for those who don’t own their own home yet. They can live in one and rent out the rest to meet ends meet.
Easy to manage
With multifamily apartment buildings, you can operate multiple units for less time and money. In proportion, your material, technology, labor and marketing costs are relatively low with a multifamily real estate. You don’t need to hire multiple handymen, leasing agents, onsite property managers to manage your multifamily apartment building, as everything is under the same roof.
Exit strategies
Multifamily apartment buildings offer a number of exit strategies for real estate investors. They could sell it or convert units into condos to sell them separately to earn more profit. They can also build a new note asset by offering their property on seller financing conditions.
Complete control over everything
People investing in multifamily property have complete control over their asset’s value and performance. You can renovate a single family building and sell it at higher price, or increase the rent each year. But the potential profit from a single family house is relatively low than the profit from a multifamily property. There’re a number of ways you can increase the value of a multifamily building. Adding a single pool can increase the appeal and the value of 100 units to a great extent.
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