Commercial real estate investment is perfect for the people who cannot withstand the stock market’s volatile nature. Also, this type of investment offers a better opportunity for investors to actively participate in growing their capital, rather than watching their money being passively managed by someone else. One magnetizing aspect of commercial real estate investment is that there’s more than one strategy to be successful.
Multifamily property investment has a lot of different facets that you need to consider. Investing in rental property is best for people who want an additional source of income along with a slow and steady appreciation of the portfolio’s value. There are two types of residential rental properties – single-family and multifamily. Single-family rental properties, as the name implies, are properties with one available unit to rent. In contrast, multi-family real estate is associated with large apartment complexes with multiple rentable spaces. While it is relatively easy to start with a small home portfolio, the advantages of multifamily investment properties are tremendous. These three reasons will help you know if you are ready to invest in multifamily commercial real estate.
1. Financing is no barrier for you
The cost to acquire a large apartment complex for multifamily property investment will be significantly larger than investing in a single-family rental property. For example, investing in a single-family rental property will cost you somewhere around $100,000 while the cost of multifamily rental properties can go into the millions.
Since multifamily properties generate a strong cashflow at the end of the month, it is fairly easy to finance too! Also, if a tenant in a single-family property moves out, the entire property becomes vacant. However, with multifamily properties, only that individual unit out of the many units will remain vacant while others keep generating revenues. That means, at the end of the month, your cashflow won’t be significantly affected.
2. Expect quicker growth
Multifamily commercial real estate investing is best suited for people who wish to build a large portfolio of rental units. Acquiring 15 individual single-family rental properties is comparatively difficult and harder to maintain, while a 15-unit apartment is much easier to maintain and quite time-efficient. The former option will require you to contact with different sellers and will need individual inspections at different addresses. With a multifamily investment, everything is in one place, and you can avoid a lot of headaches when acquiring the property.
3. Greater long-term appreciation
Apartment complexes age better over the course of many years when compared to single-family rentals or a bunch of small rental homes. Multifamily properties are known for their long-term appreciation. The properties gain value over time as the cost of living, and the cost of rent rises. When these properties are maintained well, they are less likely to lose value over the years, which tends to be a great way for you to hedge against inflation.
So, are you ready to invest in multifamily commercial real estate? If yes, you can contact us at Perfect RealEstate Investments, and we will guide you through the entire process, offering our expertise every step of the way in order to ensure that you make the best decisions. Call us today!