Is Multifamily A Good First Time Real Estate Investment?
Are you thinking about investing in a multifamily property for the first time and are wondering if it’s going to be a good first-time real estate investment?
The answer to this question is yes, a multifamily property will make an excellent first-time real estate investment but the reality is that investing in multifamily properties isn’t for everyone. This is why in this article we’ve provided you with a list of pros and cons that will help you to decide if you should invest in multifamily or not.
More Cash Flow Than Residential Properties – It doesn’t matter if you purchase a 2-plex, 4-plex or apartment building, when you own a multifamily property you’re going to earn more cash flow than what you would earn if you owned a single-family home because the more doors that you have, the more income you will receive from your investment.
Everything in One Place – When you own multiple single-family homes, you have to pay for multiple expenses for each property like lawn care, HVAC maintenance, plumbing and electrical. With a multifamily property, everything is under one roof and you’re only going to pay expenses for that one location compared to having expenses on a variety of single-family homes that you may have scattered around your city or state.
Rarely Completely Vacant – Multifamily properties are almost never completely vacant because when one person moves out of their rental, there’s almost always going to be another tenant still living in the other unit. This is a huge benefit because with single-family rentals when someone moves out of the home it’s going to be vacant until you’re able to rent it again.
Easy to Find Tenants – Everyone needs housing. This fact hasn’t changed since the beginning of time and it’s actually getting easier to rent multifamily properties these days because everyone from Baby Boomers to Millennials wants to live in apartments or other multifamily rentals because they either can’t afford or are unwilling to buy a traditional home.
You Can Live in One of The Units – Another benefit that will come from investing in a multifamily property is that you will also be able to live in one of the units. This is huge because you can eliminate your own housing costs while earning cash flow from your investment property at the same time.
Sometimes Difficult to Finance – Even though you may be able to qualify for an FHA loan to buy your first multifamily property, if you plan on living in one of the units, the reality is that your next multifamily property may be more difficult to finance. You may be faced with paying a large down payment, interest rates are often higher and you could face having to pay a balloon payment as well.
May Be Difficult to Sell Depending on The Market – If you plan on selling your multifamily property in the future, it may be difficult for you to sell because depending on the condition of the real estate market, some investors may not want to purchase multifamily properties.
More People Under One Roof – Another con to consider before you invest in a multifamily property is that you may have to deal with more people’s problems since you’re going to have more tenants under one roof. Unless you hire a property manager, you’re going to have to deal with those tenants yourself including their complaints, concerns, and problems on a regular basis compared to dealing with just one tenant when you own a single-family property.
Management Expertise Needed – When you own a multifamily property it’s essential to have a wide variety of skills including accounting, electrical, plumbing and even contracting. If you have a lot of skills, that’s great and you should be able to put them to good use. If you don’t have many skills then it’s best to hire a trusted property management company to assist you with managing your investment property.
Multifamily investing is without a doubt one of the best real estate investments that you can make at any age and what’s best of all is that it doesn’t take a lot of money to get started.
As we stated on the cons of investing in multifamily, owning a 2-plex, 4-plex or small apartment building can indeed come with a lot of work and this is why it’s important that every investor hire a property management company to help them manage their multifamily investment property.
Contact Rent Portland Homes – Professionals
Do you need property management for your Portland Oregon Multifamily Investment Property? Contact Rent Portland Homes Professionals today by calling us at (503) 447-7735 or click here to connect with us online.