Investing in multifamily real estate is a popular way for both new and seasoned investors to reap benefits from the real estate market. This article highlights several reasons why.

Rapid Portfolio Growth

As Investopedia’s Warren Cassell Jr. points out, multifamily real estate is a way to rapidly grow your portfolio of properties. Cassell uses the example of an apartment building with 20 units versus 20 separate single-family homes: The former is much easier to obtain than the latter, requiring one loan instead of many, a single seller instead of 20, and so on.

Easier Management

Comparatively speaking, managing multiple units within one building is easier than managing multiple, separate buildings. For instance, having multiple single-family homes in your portfolio may necessitate dealing with multiple property managers. That can make coordination difficult. However, if you invest in a multi-unit building, you’ll be able to rely on a single property manager to take care of its affairs.

Easier Improvements

Improving multifamily real estate is a simpler process as well. Renovating a single-family home, for example, will cause massive disruptions to the tenants and may need to wait until the property is vacant—and therefore generating no money. If you have a multi-unit building, on the other hand, you can renovate units as they become vacant while still drawing income from the occupied units.

Other Income-Generating Opportunities

Multifamily properties offer income-generating opportunities beyond rent. These include:

• Coin-operated laundry machines in a common area. 
• Vending machines. 
• Deals with businesses such as food trucks, which may come to your property and share a slice of the profits in exchange for promotion. 
• Various fees.  

It’s important to be careful not to tack on fees to the point that they turn off potential tenants or frustrate current residents. However, if handled delicately, ancillary income generation can boost your bottom line—and add to the appeal of owning multifamily real estate. 

Need a head start on financing your next investment? Get in touch with Increase Lending today!