In running real estate business, there is always chance for you to level up your game to another level and grow your business even more. For the first investing, it is common for investor to choose a single-family home. This is a good start since everything is relatively bearable. When things run smoothly and the profit allows purchasing another asset, the next step is to invest in multifamily purpose.
It will be easier for you to step up your investing if you have built strong rental portfolio exclusively with single-family properties. Of course, there are difference between investing in single-family properties and multifamily properties. The way you run your business will be slightly changed.
Benefits of leveling up investment to multifamily properties
Even though there will some changes to the way your business run, it isn’t a bad thing either. Business is something dynamic so you’d better get used to changes and all if you want to keep step ahead of your competitors.
It is also common for single-family property investors to doubt themselves to level up investing to multi-family properties. If you are feeling the same things, you might as well take a look at the reasons why leveling up your investing to multifamily properties are not bad idea at all.
If you can invest in the right multifamily property in the right location, you will gain increased cash flow exclusively. It is just reasonable since the amount of units is increased. It means you can generate more income then when you do to your single-family properties. It is overwhelming as well as tempting. Lots of investors sometimes are not confident especially in handling multiple units even though the profit is rewarding. However, all units are in the same place so it won’t be as complicated as it sounds.
Contrary to popular beliefs, investing in multifamily properties is less risky. With multiple units, you won’t have to rely on a single tenant. Meanwhile, you only can rely on one tenant if you only have single unit so it will be a big hassle when your single tenant doesn’t pay for the rent for example. If you have multiple units and one of the tenants doesn’t pay, you still have other tenants to rely on.
Another reason why investing in multifamily properties is a good chance is because it has less tough competition. Most investors focus on single-family property investing. Thus, the door of success for multifamily property investors is open wider. The competition is decreased in many areas.
Next reason is that multifamily properties have greater initial equity. You can start off with a good amount of equity due to the down payment guidelines. You also have the opportunity to add the value of your property by working on some parts of it. With greater equity, come more options and flexibility. You can rent your units for certain period and when the market turns, you can sell it since you have strong equity position. Another option available is to switch loan programs.