If you have your eye on a future as a real estate investor, then you are likely thinking along the lines of a single occupancy home. This is the classic, conventional form of property investment— but it’s not the only one.
One of the best ways to maximize your return from property investing is to look to investigate multi-family dwellings. Rather than buying a single unit, which you let to a single family, you may actually find it more beneficial to buy a unit that can be split and rented to multiple parties.
Not convinced? Worried that such an idea would actually make life harder? Perhaps these simple facts will change your mind…
1) One property, multiple income streams
To buy a multi-family unit, you will pay a single set of purchase fees; a single mortgage; a single set of property taxes… yet you receive income from multiple streams.
Not only does this help to ensure the best return on your investment, but it also offers a level of protection. If you invest in a single-family property and you struggle to find a tenant, then your income stream is zero until you do. However, if you invest in a multi-family development, you have multiple potential tenants. This means that if one unit is not occupied, you’re still going to be able to rely on the income from the other units in order to pay your mortgage.
2) Easier maintenance when compared to multiple separate properties
Real estate investment is all about expansion and making the most of the properties you have. That’s why many investors choose to expand their portfolio, buying multiple properties in the hopes of securing their financial future.
If this idea appeals to you, it is worth remembering it has a substantial downside: you have to deal with the regulations, maintenance, management, and tax burden of each individual property.
With multi-family properties, you have no such concerns. The management is simpler, as all of your investment is based in a single location; and you’ll find it easy to organize tasks such as apartment renovation and tenant management when you only have one building to focus on. Compared to multiple individual properties, the management of multi-family units is a drop in the ocean.
3) The potential for tax breaks
While this point is somewhat dependent on the city your property is based in, it is far from unusual to find tax breaks for multi-family property. There are numerous deductions that you can take advantage of; government likes to incentivize multi-family properties due to how useful they can be to the local community. If you want to maximize your return on investment, then the financial justifications for choosing a multi-family over a standard single dwelling are persuasive.
If you really want to make your way in the world of real estate investment, the benefits of multi-family properties cannot be overlooked— and such a choice could deliver the returns that you are hoping to achieve.