Why More Real Estate Investors are Turning to Multifamily Apartments
Once you establish yourself in the single family home fix and flip or fix and rent arena, you may consider turning to bigger fish, namely multifamily apartments. Consider these reasons to expand your horizons beyond single family property investment.
1. Save Time Purchasing a Property
Buying single family homes to fix up and rent takes a lot of time. You may be able to support three or four properties a year if you are good at what you do. However, buying multifamily apartments allows you to make one deal but gain many units at once. This means one set of research, one set of paperwork, and one set of contractors. This frees up a lot of time!
2. Save Time Managing a Property
Another way multifamily apartments save time is in managing the property. There are two reasons for this:
• You have the financial margin to afford to hire a property manager.Most investors who only own single family homes don’t have this margin, since the property manager is paid a percentage of the rent. This option allows someone else to manage the property including collecting rent, finding and screening tenants, dealing with evictions and managing repairs.
• One location.Management can be more efficient in one location. Repairs and maintenance can become more efficient as it is done at that one location. Driving time and other costs are reduced due to the property having multiple renters in one building.
3. Potential for Greater ROI
When a single family home isn’t rented, it makes a large impact on the ROI. However, in a multifamily apartment building, there are many renters. So if one unit is temporarily not rented, it doesn’t impact the bottom line as much. In addition, you can scale the feel of your building to a certain group of tenants such as young business people, upscale clientele or small families.
4. More Control of Property Value
The value of multifamily properties does not rely as much on comps as it does on your ability to increase the value of the property with improvements as well as the clientele you serve. How you manage the property and the reliability of your tenants can have a big impact on the property value.
Consider these reasons why more real estate investors are turning to multifamily apartments, and see if this move is right for you.