Multi-family properties continue to be one of real estates most solid investments. Even as today’s real estate market is declining & foreclosures continue to increase people still need a place to live. Where are the families going after being forced from their homes? Most will move to some type of rental property.
As the typical single family market continues to decline multifamily real estate is stabilizing with very low vacancy rates. Multifamily owners & investors have realized this and are hanging on tight to their multifamily units, especially apartment buildings with five or more units.
Financing Investment Real Estate
Investment real estate is in a lot of circumstances easier to obtain financing for than a single family property. What it comes down to is if the property is producing income. Lenders don’t like properties that have a lot of deferred maintenance, delinquent rent payments and occupancy issues, as these are signs of poor management and as a result poor marketability of the property.
This will raise concerns for the lender as now they will have concerns how the property will match up to competing apartment buildings in the rental market over the long term. Commercial lenders want to see that you have had some experience with managing tenants, and that the property has solid cash flow to support the expenses and upkeep. Most experience investors can spot a solid building without even going through all the financials.
Generating Multiple Streams Of Revenue
When looking to purchase multifamily investment real estate it is wise to consider different ways to create cash flow if needed. Some examples are coin operated laundry, which can be rented or owned, if the lot allows, it is possible to add some storage units or garages for tenants to rent, vending machines can be put it at no cost to you, & still give you a percentage of income.
Always research rents in the area that you are looking to purchase, if the rents are low they can be increased. Be creative & use commonsense in terms to investment real estate. When looking for a multifamily investment it is a good idea to seek out a seasoned investor to advise you and/or a Realtor that has dealt with the process of purchasing multi family properties.
Investments just do not exist that have all the tax benefits and the rate of return that real estate offers, which in turn makes it a very solid long term investment.