Do you want to expand your investment portfolio, but are not quite sure where to begin? Think multi-family real estate. Here are five key reasons why you should look into this property type.
- There is a large renter pool in the Bay Area
It’s no secret that San Francisco and Bay Area real estate ranks as one of the most expensive in the country. And with property prices continually on the rise, it makes more sense for other people who want to live in San Francisco to rent instead of buying a home.
In fact, even a significant chunk of the Bay Area’s high-income residents prefer to rent. And with the demand rising for rental properties, there has also been a surge of new and upscale developments in San Francisco and other Bay cities.
- There are plenty of opportunities to invest in multi-family real estate
As the rental supply catches up with the demand, more windows of opportunity to invest in an apartment or other forms of multi-family properties open up. You’ve got small apartment buildings and duplexes, boutique residences, and sprawling apartment complexes that offer many amenities.
With so many options to choose from, it really is just up to you and what you envision your multi-family property to be.
- Multi-family properties are easier to finance
At first glance, buying a multi-family residence might seem more expensive than purchasing a single-family home. One unit can already cost tens of thousands of dollars (even more), so you can only imagine how much it would take to purchase an entire building.
That said, it’s surprisingly and relatively easy to get financing for multi-family real estate. The reason is simple. Unlike single-family homes, multi-family properties generate a much larger cash flow every month, given the building is mostly occupied. And even if the property only has a handful of tenants, it still generates income.
Because of that, lenders, banks, and other institutions view multi-family real estate as a less risky investment than single-family homes.
- You can grow your portfolio within a shorter period of time
If growing your portfolio is the main goal, it would be easier for you to achieve that with a multi-family property.
See, when you purchase a single-family home, you only invest in a single unit. When you buy an apartment building, you also acquire multiple units (depending on the number the apartment has). You undergo one buying process and get several residential or commercial units by the end of it.
- You can hire a property manager
Many people are scared of the thought of having to handle multiple real estate units at the same time. It is a daunting prospect, but it isn’t the only outcome when you invest in a multi-family property. You can hire the services of a professional property manager to oversee your portfolio and concentrate on your usual routine.