WHY APARTMENTS

What is a Multifamily Property?

For those who are new to real estate investing, it is important to understand what a multifamily property is. A multifamily property contains two or more units within the same building. These

units can be similar in shape or size, or not. Either way, they can accommodate multiple occupants--either as individuals or families. Some good examples of multifamily properties

include duplexes and apartment buildings.

Multifamily properties are viewed as the best and most affordable housing option. And not just affordable for families, but people at various stages in their lives. This makes multifamily housing highly preferred among real estate investors, who ensure a lower vacancy rate due to the high demand for these properties. Given many types of properties to invest in, what are the benefits of investing in a multifamily property? Below are some of the benefits that make this a strong investment vehicle. Additionally, learn ways in which you can capitalize on these benefit offered by multifamily properties.

1. Increased Cash Flow

The cash flow advantage is one of the main reasons why real estate investors should consider putting their eggs on multifamily properties. As mentioned above, multifamily properties are in high demand. You can expect a high occupancy rate on your property, especially when in a strategic location.

2. Low Acquisition Cost

Multifamily properties are more affordable than other types of real estate properties. It is a relatively risk-free investment for first-time investors, and it offers higher rates of return in the long run. If you choose to apply for a mortgage loan to build or purchase a multifamily property, you can expect lower mortgage financing rates. The foreclosure rate on this type of property is lower than that of a single-family unit, which explains why mortgage lenders can offer competitive rates for investors in this type of property. This reduces operating costs, bringing more revenue to your pocket in the long run

3. Easier to Manage

Easier to UseIt is easier to manage 12 units in one roof than it is to handle 12 different rental units spread throughout the city. This is a practical reason that makes multifamily property investment makes a lot of sense--and it is a type of investment that would justify hiring a property manager.

6. Less Investment Risk

Though there are risks involved in multifamily property investment, they are considerably lower than other types of property investment, even including single-family homes. The only risk involves the vacancy rate. Since you are dealing with multiple separate tenants, the risk of a complete vacancy is relatively low. As long as you have done your research about the location before hand and you market your property, you shouldn't have to worry about that. When all else fails, the value of a multifamily property grows over time.

5. Appreciation rates are high

Multifamily properties hold their values. In fact, the value of most real estate properties increases overtime. This is true with multifamily properties, too, but the appreciation rate is higher with this type of property. The appreciation depends on a number of factors such as the economy and other market conditions. To increase the value of your property, make sure that it is well-maintained. Well-maintained properties command higher rental prices and draw more potential renters.

4. Great Tax Benefits

The government provides tax incentives to multifamily property investors. To incentivize this effort, the government provides tax incentives to multifamily property investors, of which you can take advantage. The type of tax incentives you can enjoy will depend on the type of classification on your property. Any tax breaks you can get would mean added revenues toward your pocket.

7. Build Your Portfolio Faster With These Tips

Finally, if you are serious about real estate investing, this type of investment can boost your portfolio quickly. This is a good option if you want to invest in multiple rental units. After all, it is easier to acquire one apartment building with multiple units than it is to acquire 5 or more single-family homes.Just imagine this: inspecting and closing on one apartment building are easier and less time-consuming than doing the same for 5 or more single-family homes.