It is said that investing in real estate is one of the best things you can do if you want a long-term profit and financial security. While this is true, investing in real estate can be a bit more challenging, warns advantage-properties.com, specifically from the point of view of the funds required. Not everyone can invest in real estate, considering the large amounts of money needed to purchase a property. Multi-family homes, for instance, come at much higher prices than an apartment or single-family properties. However, try to keep your mind open as you continue reading these lines and see what opportunities unroll in front of your eyes.
More expensive, but also easier to fund
The lack of sufficient funds is one of the main reasons that keep people from investing. If you are just looking to start and find opportunities that will multiply your funds and help you grow your investor reputation, maybe you know what we are talking about. When looking to invest in real estate, smaller properties, like apartments and single-family homes, are more attractive from the point of view of costs, here are some great investment examples from UpFlip. But larger properties, like multi-family homes, have much higher chances of attracting funds from lenders. In other words, it is easier to get the needed funds back when looking to invest in a multi-family home. Although it is more expensive, the reason this happens is very simple. A multi-family home is capable of producing consistent and steady monthly income, in comparison with a single-family unit.
So, banks are looking at the potential of the unit to make income every month when determining whether the loan will be secure or not. This is why you’ll have a much better shot at getting the funds you need for a more significant investment. In this case, even if you don’t have the funds necessary to buy a multi-family home, it is worth applying for the financing you need because it will be easier to obtain it.
You can live in it as well
When it comes to multi-family homes, you can easily make it your residence, while renting the remaining rooms or space to anyone interested. So, besides getting a home for you and your family, you will be able to generate income by renting the available space. The best part about investing in a multi-family property is that if one unit remains vacant, you will always have the rest to cover for the loss. But, in the case of one single-family property, if the unit is vacant, the property will practically produce nothing, consuming resources on maintenance.
With so many multi-family homes for sale at the moment, it is quite easy to choose the one that is most suitable and profitable in your case. But, you should make up your mind as soon as possible, as more and more real estate investors are starting to notice the potential of investing in this type of property. Considering that the millennials generation is now reaching the end of their 20s and the start of their 30s, the demand for rental properties will grow. Most of these millennials will probably be looking for a place to call their own, even if it’s just rented, so the opportunity to cover your investment and enjoy a profit is significant under these circumstances.
Your investment portfolio will grow fast over a short period
One of the biggest advantages of investing in properties suitable for more than one family is that your portfolio will grow very fast. If you are just at the start of your career and reputation as a real estate investor, building a portfolio is probably one of the most considerable challenges. Building a portfolio comes together with making an investment, which is not that possible when you’re just starting. But, in the case of investing in a multi-family home, your portfolio will look much better in a very short period. In other words, you will have several units available for rent in your portfolio, compared to just one, in the case of an apartment or single-family house.
This is definitely something you need to consider before choosing how to make your investment. Yes, it is indeed scarier to invest in large and expensive properties, but if the advantages are more consistent than the disadvantages then it is worth considering it. Also, considering that a multi-family property produces a more significant income on a monthly basis, you could take advantage of property management services. This is usually something that not all property investors can afford because it shortens their profit margins. But when your property is generating a good profit, you could enjoy such services. Of course, make sure the income you make will be able to cover this kind of service without affecting your profit in a significant manner if you want to enjoy a great return on investment.
Rental units are the best way to go