Investing one’s capital, compared to simply storing excess funds in a low interest-bearing savings or CD account, is a popular way for people to prepare for the future and build their wealth. Investing comes in many forms including making a multifamily investment, but while many investors experience some success, most if not all investments are not risk-free.
What Are the Types of Investments?
An investment portfolio can be a collection of various investments including stocks, bonds, investment funds, cash equivalents, real estate, and art. Reportedly, 56 percent of Americans own stocks and individual investors own nearly 14.3 million rental properties.
What is a Multifamily Investment Property?
A multifamily investment property is simply a residential property with more than one unit. These properties range from a two-family duplex up to larger 5+ unit properties that typically fall into the commercial real estate property category. Larger properties include large apartment complexes and high-rise apartment buildings.
Why a Multifamily Investment Can Make Sense
A multifamily investment can make sense because it can offer:
• Consistent cash flow from monthly rents.
• Passive income. Assuming that a property owner hires a property manager to handle all the day-to-day operating responsibilities including renting property units, collecting rents, managing maintenance, and repairs.
• Solid valuation potential. Most multifamily properties appreciate over time despite economic swings.
• Lowered risk. The multifamily real estate sector is considered to be relatively safe as an investment category.
• Loan simplicity. Multiple investment properties can be purchased with one traditional bank loan.
• Insurance simplicity. Often, multifamily investment properties are simpler than other real estate types.
• Scalability. This investment class leads to grow over time.
• Tax benefits.
What to Consider for a Multifamily Investment
Things to consider include a good location, the number of units that can be rented, the potential for rental income, and the costs of property acquisition. It is also important to scrutinize the seller.
Seek Experienced Financial Assistance
Contact Commercial One Group. We offer a diverse portfolio of commercial financing to meet your growth investment needs.