Multi Family Properties As An Investment

by David Gerlitz on January 25, 2011

We feel strongly that real estate investors should consider multi family properties as an investment. These properties provide useable income for years and can be as small as a two family duplex or as large as an apartment complex with more than one hundred families living there.

Multi Family Properties As An InvestmentOne reason for investing in multi family properties is the economy of scale. When there are multiple rental units at a single address the expenses and other services that come from managing and operating the unit can be controlled easier. This helps decrease the cost per unit and increases cash flow.

An investor can usually get better deals on appliances and repairs for multi unit dwellings. When service providers realize there is a large volume of work to be done they are more likely to negotiate it at a lower price.

This is also true for purchasing insurance for the multi unit. When an investor only takes out one policy to cover the whole unit, it is less paper work. That means low overhead for the insurance company, so they will give a better rate.

Acquiring loans for multi unit dwellings is handled differently too. Since cash flow is the primary consideration for lenders, they are more likely to approve a multi family property. A lot of the times it takes less money in loans than a single dwelling.

Other considerations when looking at multi family properties as an investment are the vacancy and credit losses. Here is where an investor determines if the property is getting the maximum amount of rental monies. If the answer is negative, they will need to check their marketing strategies for getting renters. The fix for this could be as simple as doing some maintenance on the units or landscaping on the grounds.

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  3. Top Ten Reasons Investing In Colorado Properties Makes Sense

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