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3 Benefits to Investing in Multi-Family Real Estate

Whereas investing in the stock market can be quite unstable, as we saw earlier this year with the COVID-19 pandemic, real estate investing is often considered a much safer expenditure for added revenue potential. It allows the financier not only to have the potential of a more hands-on involvement with their investment, but it can also easily be managed at a distance via a property manager. You also aren’t limited to any one strategy as to how best to manage your investment property. Whether you are looking to build a large investment portfolio of multi-family properties for rent or simply invest in one or two profitable commercial opportunities, your choices are only limited by what’s available on the market today!

For those looking to build a steady, reliable source of income, multi-family properties tend to be the preferred avenue. While single-family homes only offer one or maybe two units for rent, multi-family properties or apartment buildings offer multiple income sources in one! Plus, they come with a few other distinct advantages you’ll want to consider, as well.

Multi-Family Properties Are Easier to Finance

At first glance, investing in multi-family real estate over a single family home will undoubtedly be more costly—homes typically costing hundreds of thousands of dollars less than apartment complexes. However, the reality is that when it comes to financing from the bank, a mortgage for a multi-family property may be far easier to get approved for.

The reasoning behind this is that if a single family home rental loses its tenant, the property is no longer generating any revenue whatsoever. On the other hand, with a multi-family property, if there are, say, 10 units and one of them becomes suddenly vacant, there are still 9 other units generating revenue in the interim. This more consistent and solid promise of income makes for a much safer investment, not just for you, but for the banks, as well, giving them more incentive to finance your purchase at a better interest rate.

 

It Will Be Less Time-Consuming to Build Your Portfolio

If you are hoping to build a real estate investment portfolio, it can take quite some time to build up a large number of units purchasing just one home at a time. By doing so, not only will you need to go through the home search and inspection process on each individual property, you will also need to get approved for a mortgage each and every time, too. When purchasing a multi-family property, however, you will only need to do each of those steps once, while acquiring several units as filler for your portfolio.

Property Management Will Be Easier to Justify

Not every real estate investor enjoys the day-to-day management of their properties. Instead, many elect to take a more passive revenue-generating approach and hire a property manager to take care of the more tedious tasks of being a landlord, such as rent collection, filling vacancies, evicting tenants, and general property maintenance. Hiring a property manager or management company costs money, though, and for those with only a couple of single-family homes, it can be hard to justify the added cost with the already slightly risky investment of a smaller portfolio.

Real estate investors with multi-family properties, however, will likely be generating more revenue on a consistent basis. This gives them more financial leeway to invest in property management services without significant detriment to their bottom line.

 

For those wanting to invest their money in a safer and more secure way than the stock market, real estate investing can be a fantastic opportunity to consider! And electing to build your portfolio with multi-family properties over single family homes can be a simpler, quicker, and more flexible way to do so!

Ready to build your real estate portfolio? Check out multi-family properties for sale in Saskatchewan today!