Multi-Family Property Investments
Let Perfect RealEstate Investments Walk You Through the Process of Investing in Multi-Family Properties
Whatever the case may be, at Perfect RealEstate Investments, our goal is to guide you through the entire process, offering our expertise every step of the way in order to ensure that you make the best decisions.
At Perfect RealEstate Investments, our goal is to arm our clients with knowledge. That’s why we’ve put together a library of helpful information below. Whether you’re curious about the benefits of multi-family investment properties, their potential risks, the types of apartment buildings available, or some of the challenges you may face, you’ll find that this page contains a wealth of knowledge.
Explore Multi-Family Property Investments With Us
A sub-category of apartment property types, multi-family structures are longer-term investments than single-family homes. Complexes take longer to sell and are more complex to manage. However, when handled correctly, owning a multi-family property can be a great source of income. You have many options:
A building with at least one elevator and nine or more floors.
A building with an elevator.
A one-, two-, or three-story apartment building in a garden-like location; it may or may not have elevators.
A four- to six-story building without an elevator.
A community in which ground sites are leased to owners of manufactured homes.
A complex with at least half of its units intended for students attending a nearby learning institution.
Housing for senior citizens providing certain levels of care.
There Are Different Types of Apartment Buildings
If you decide to invest in residential income properties, the first thing you should ask yourself is: What Should You Buy Multifamily or Single Family? There are also different classes of multifamily properties. When deciding on a particular property you need to consider the class of the building and not the size.
- C&D properties are not suitable for distant or out-of-state investors
- First-time investors are also advised to stay away from C&D properties
- Generally speaking, Class A & B properties have a lower CAP rate compared to Class C & D properties.
- Will I Take Care of Rental Property Management Myself or Hire Professionals?
- Manage the Property Myself: If you are a handyman and good at fixing things yourself, you can consider buying C & D class properties. If you are not good at fixing things yourself – do not consider C & D class properties.
- Hire Professionals: Look at A & B class properties as it is very difficult to find a management company willing to take care of C&D properties unless the property is fairly large.
Benefits and Risks of Investing in Multi-Family Properties
As with any commercial property investment, there are benefits and challenges, or risks. The good news is that when you work with Perfect RealEstate Investments, you will have a dedicated investment advisor on your side. Let’s explore both the benefits and challenges of multi-family property investments.
Benefits of Multi-Family Investment Properties
Commercial property investments are often rewarding, but if you’re looking for an investment property with a number of benefits, look at multi-family properties. Here are the top reasons to give this property type a try.
Cost of Entry
Investing in certain types of properties can be challenging, especially when you are new to the business and don’t have a previous property investment under your belt that will show lenders your properties can be profitable. When you’re investing in a multi-family property, however, there is a smaller cost and a lower risk.
Performs Better in Economic Crisis
Ohio has seen phases of growth and decline, but regardless of what’s going on with the economy, people will still need housing. In some cases, when families need to downgrade from a single-family home, they will move into an apartment complex where the cost of living is lower. This increases demand and can improve your profit margins with additional tenants.
One of the risks of investing in single-family homes is having a vacant house when a tenant moves, and therefore it’s not generating an income. With a multi-family property, however, if the building has 20 units and five tenants leave, you can still safely rely on the other 15 units to supply a steady cash flow. The remaining revenue will still be enough to cover any expenses.
Challenges of Multi-Family Investment Properties
Even the most reliable commercial property investment has its own challenges and risks. If you are thinking of investing in a multi-family property, working with an experienced and knowledgeable investment professional can help. Get advice and guidance from Perfect RealEstate Investments.
Unlike industrial or hospitality commercial properties that push for a minimum of three to five-year leases, residential properties typically only offer 12-month leases. While this isn’t necessarily a bad thing, there is an increased risk of tenants moving after their one-year lease is up. This can increase the amount of time needed to market empty units, find new tenants, and maintenance costs that are incurred when tenants move in and out.
With more units, comes more maintenance and service requests. A multi-family investment property will need to be closely managed to ensure all essential symptoms are working efficiently, such as plumbing, HVAC, and electrical. With more people, there may be more late-night calls for maintenance as well. When considering this type of investment property, you will need to ask yourself if you have time to manage the property or if you will need a professional property management company.
- Growth: The area/property gains acceptance and experiences growth.
- Stability: Growth levels off and the area maintains a level of stability without significant gains or losses.
- Decline: The area/property begins to decline and demand decreases.
- Renewal: There is a period of rejuvenation as the market increases and the phases start over.
Even though it’s easy to understand the risks on the surface, it’s another thing to actually experience them first-hand. If you are considering investing in multi-family properties, work with the team of real estate investors at Perfect RealEstate Investments for personalized advice, honest opinions, and expert guidance.
You Have Questions — We Have Answers
Backed by decades of experiences in real estate investments, our personalized guidance can make all the difference in the world. After all, real estate investing for beginners can often feel overwhelming, confusing, and uncertain. When you work with Perfect RealEstate Investments, you’ll receive personal support from the beginning — and if you need it, we’ll be here for you for years afterwards as well. At the end of the day, it makes sense to seek help from a professional rather than jumping into the world of investing in commercial real estate on your own.