If you are new to real estate investing, you probably hear all the benefits of having a rental property, but did you know you can benefit more with multifamily housing? Multifamily investing is going to allow you to generate more income in the least amount of work and stress. Many successful investors who have pursued investing in multifamily properties will tell you that it is one of the most powerful investment strategies in the market today.
Did you know when you invest in multi-housing properties, you are allowing to create homes for people who may not have access or have the capabilities to afford such a place. One of the things that allow for the success of real estate syndication is that it encourages investors to look and think outside the box. Much of the real estate opportunities that come with multifamily housing and real estate syndication are in properties that are boarded up, ill-maintained landscapes, graffiti on the walls, dirt, and things that would not seem appealing to large businesses looking to create profitable properties.
When a sponsor and investor see the potential in these properties, yes, they may require more work; however, the payoff is so much greater than increase income for investors, it helps contribute back to the cycle of the economy. A thriving economy means a thriving rental property for you.
Multi-family properties hold their value over time
While some investments and purchases lose value over time, multi-family properties will typically hold if not increase in value. When a new investor purchases a multi-family dwelling, once they have rehabilitated the property to be in rental shape, tenants can move in and the steady income and revenue can begin. If the investors and sponsors maintain the properties so that potential and existing tenants are happy — there will always be a steady influx of revenue.
The maintenance of properties is essential in ensuring the property retains its worth over time. Minor repairs should not be ignored so that they become larger problems and ensure that tenants are respectful and responsible.
Just with any basic business motto, if you invest in your people, your property and yourself, you will reap the rewards. This is a true statement when it comes to multi-family investing and the properties itself.
Providing housing = tax break.
When you invest in multifamily dwellings, the government recognizes what you do by providing tax breaks. Tax breaks will vary from city to city; however, the gist is very much the same across the board. Providing a home means you are helping the residents of the city by providing clean, safe, and affordable housing — which is not always easy to come by.
When it comes to investing in multifamily properties, it is important to have a seasoned and knowledgeable CFO (chief financial officer) or CPA (certified public accountant). Having the right knowledgeable people on your side can ensure that you get the most in grants and deductions by the government. If you are lucky, you may benefit from investing in zero-property taxation.
Purchasing multifamily units is one way of increasing your non-existent cash flow; however, did you know that there are other ways of increasing your cash flow? One way of doing so is including and laundry facilities, storage units or security.
Having an on-site laundry facility with coin-operated machines can benefit tenants and units who may not have direct access to laundry facilities. Sometimes it makes it easier for tenants to pay to use a laundry machine on site than not.
Another added benefit that can increase the potential investor’s cash flow is through storage units. Rather than having tenants rent out storage units off-site they can have access to one on-site. While not everyone will need storage, you can choose to charge extra for the units rather than give each unit one to access.
These small conveniences can result in inconveniences that tenants are willing to pay extra for.
With single-family properties, it can be difficult to increase the property’s value and worth. With multi-family properties, you can increase the value through added changes. For example, with multi-family properties, you can choose to invest in a communal laundry space, storage or even a game room. These can add to the value of the property and encourage a certain type of tenant.
The small changes and investments you do to the property will show tenants that they can expect their homes to be well-maintained and taken care of. Revitalizing and ensuring the landscape doesn’t overgrow or that graffiti’s and broken windows are addressed will only add to the value home and property.
One roof with multiple properties = Easy Management
If you have 10 single-family properties, that means that there is a need to go to 10 individual properties to ensure that everything is up to standard and code; however, if you have one property with 10 single units, this makes management much easier and more convenient. Depending on the management of the properties, this means that you can ensure all the units are taken care of on-site.