5 Big Reasons You Need to Invest in
Real Estate Now
The Advantages of Multi-family Investing
Deciding where to invest your hard earned money can be a daunting task. If you are a savvy investor you probably know to invest in real estate. It’s the greatest place to invest your funds. There are many arguments out there as to whether it’s better to invest in single family homes or multi-family complexes. I don’t think there is a right answer. It all comes down to two important elements; how hands-on do you want to be and what your goals.
Like with almost everything, with more risk comes the potential for greater gains. If you are true believer in higher education, then the more educated you become about something the less risky it will. This is because you have acquired the proper knowledge to make well-informed decisions.
Investing in multi residential properties typically involves more cash and does have risks associated it with. However, there are some definite clear advantages to investing in this asset class that should not be overlooked.
What are Some Advantages of Multi-family investments?
- Economies of Scale– Multi-family properties have greater income potential than single family homes. As there are more units, the monthly cash flow that you are able to obtain is potentially higher. There’s also a significant cost savings with multi units as well, These savings range from property management fees to buying bulk material. If you want to invest in real estate and build wealth, you can certainly do it faster with multi-family properties than single family residences.
- More flexible sellers– Owners of apartment buildings are usually less emotionally driven and more business driven with the sale of their properties than owners of single family homes. As they are more likely to treat these as business transactions, and they can be more willing to assist with creative financing (i.e. seller financing) to finalize the sale.
- Lower vacancy risk– The risk of vacancy is lower with multi residential vs. single units. Multiple tenants spread the vacancy risk. As an example, one vacancy with a single family home equates to a 100% vacancy and no cash flow. If one unit in a 25 unit is empty it’s only a 4% vacancy but you will still be bringing in positive cash flow from the other 24 units.
- Equity build-up– The income that is produced from the tenants is what determines the value of a property. This again removes any emotional decisions when you want to sell.
- Depreciation – One of the greatest benefits of owning multi-family real estate is that it can be depreciated. You can expense the property costs over numerous years. These non-cash expenses allow you to reduce your taxes all the way down to zero if you know how to set it up.
These are just some of the many advantages when you invest in real estate using multi-family real estate. It is such a great investment opportunity.
Remember, real estate doesn’t have to be complicated.
With Simple Acquisitions it’s smart and simple!