Invest Now Capital

5 Benefits of Multi-Family Real Estate Investing

Most investors choose to become real estate investors because it consistently delivers more long-term growth and steady cash flow than any other asset — and among your real estate investment options, multi-family is king!

There are so many benefits of multi-family real estate investing that they’d take a whole book to cover if we were to do it justice. In fact, we already wrote an entire ebook about how multi-family real estate is recession-proof!

In this post, let’s explore five main benefits unique to multi-family real estate investing…

1. Portfolio Diversity

Multi-family investments are often categorized as a single real estate asset class. However, they actually encompass a sector and offer you a bunch of different property types to choose from, including:

  • Duplexes
  • Triplexes
  • Fourplexes
  • Apartment buildings
  • Bungalows
  • Highrises
  • Recently renovated properties
  • Multi-purpose commercial properties
  • Retirement communities
  • Private student housing
  • And more!

You can also experiment with the types of leases you want to offer. If you want to dip your toe into the rental property world, set up an Airbnb or VRBO account and see how you fare as a short-term rental owner — or give medium-term rentals a try!

2. Fewer Loans

When it comes to financing, multi-family leaves single-family  in the dust. Instead of getting ten different loans for ten different single-family units, you can get a single loan for an entire complex of ten units. That means you’ll have to deal with one-tenth of the paperwork, saving you a lot of time and reducing your chances of accidentally missing something, like a mortgage payment.

As an added benefit, fewer loans equates to fewer insurance policies. You can get a blanket homeowner’s insurance policy for your entire building rather than having to manage an individual policy for each unit.

3. Less Risk

Multi-family properties have outperformed other types of real estate during the last five recessions.

Why?

Because people tend to downsize when times get tough, but they always need a place to live, and living in an apartment is usually cheaper than living in a house. Apartments are also great for people who are just getting their footing, who are looking to retire or just retired, and who are looking to save money before buying.

In other words, multi-family properties are popular when the economy is doing well and when it isn’t.

4. Increased Value

Not only is multi-family real estate investing less risky, but it’s also more valuable! Multi-family properties are experiencing an average of 10% year-over-year growth and are outpacing pre-pandemic appreciation growth rates.

There are multiple factors that contribute to the value of multi-family properties. First, they can achieve higher natural and forced appreciation rates than their single-family counterparts. You can also achieve economies of scale with them. In addition, if you lose a tenant, the rental income from your other tenants can help offset your loss and makes it likely that you’ll still enjoy a positive net operating income.

5. Property Management Makes Sense

Working with a property management company is one of the smartest things you can do as a multi-family real estate investor. If you own two or three units, you may be tempted to do all the maintenance, marketing, and management yourself. Doing this can be very time-consuming. Rather than focusing on growth, you’re spending your spare time driving to your properties to fix leaky faucets or posting ads on social media for new tenants.

When you have an apartment complex, there’s absolutely no reason for you to be doing all the work. Property management companies handle all tenant interactions, like:

  • Finding tenants
  • Screening tenants
  • Retaining tenants
  • Collecting security deposits
  • Collecting renters insurance
  • Getting leases signed
  • Handling rent
  • Responding to maintenance requests
  • Dealing with defaulters
  • And so on

They’re well worth their 8% – 12%. We cannot emphasize that enough.

Multi-family Real Estate Investing with InvestNOW Capital

These are just a few of the many incredible benefits of multi-family investing. Do you want to hear about a few more? Send us a message! We’d love to hear from you.