Multifamily properties are seen as some of the most affordable and best housing options for people at different stages in their lives; that’s why investing in this type of real estate is a safer place to put your money.
In fact, according to the world’s largest commercial real estate investment firm CBRE, from 1992 to 2017, multifamily real estate provided the highest average annual total returns of any commercial real estate sector with the second lowest level of volatility. But there are even more reasons why investing in Multifamily properties can pay off. Here are three of them.
The cost of developing or remodeling a multifamily property is more affordable when you look at it on a per-unit basis. When it comes to getting a loan, multifamily properties also tend to come with lower mortgage rates, making them more cost efficient. Foreclosure rates on multifamily properties tend to be lower than single-family units, making it easier for lenders to offer investors competitive rates for these types of properties.
Some real estate investors choose not to manage their properties due to stress or other time constraints. Another advantage of multifamily properties is the amount of revenue they can produce. This allows investors or owners to hire outside management to deal with the day-to-day worries of filling vacancies, making repairs, dealing with complaints or collecting rent. With these tasks delegated to a property manager, investors have more time to plan their next big investment.
Finally, if you’re serious about investing in multiple properties, these types of dwellings can help boost your portfolio more quickly. Acquiring a 30-unit apartment building is easier than purchasing several single-family homes. And because multifamily properties tend to bring in more income, that results in the ability to purchase more properties down the line.
Are you a real estate professional looking for representation in commercial transactions? Caiaccio Law Firm’s clientele includes commercial and residential developers, sponsors, investors and lenders. Our firm’s experience in commercial real estate transactions covers property types, including multifamily, single family, retail, hotel, and office properties. We have a specific concentration in representing multifamily operators, property management firms, and commercial developers.