Multifamily properties are having their moment right now. Recent investment surveys have recorded that many single-family investors are now showing keen interest in the multifamily investment space.
What is the reason behind that? Why such a keen interest among investors for multifamily properties? Commercial real estate Austin has listed a few reasons below. Keep reading to find out!
Different reasons why single-family investors are turning into multifamily property –
They give more direct control –
Through increasing NOI, you can increase the value. For single-family homes, the value of the property is directly tied to its surrounding comparable. However, multifamily properties allow the investors to have solid control over the property value.
They support a higher ROI –
The most challenging parts of investing in any commercial property are – improvements and renovations. But, they have their advantages as well. Flipping properties can be fun and profitable, yet very risky. In a multifamily property, doing the necessary renovations and improvements can increase the appeal as well as the value of the asset. There on, you can also demand a higher rent and that will elevate the ROI.
Multifamily property investors can also reposition and control the value of their property more easily. These properties can be positioned to – affluent tech workers, tenants, and others.
They allow the investors to save a lot of time and money –
Owning a 46 unit apartment building takes a lot less time and work than owning 46 single-family homes. Commercial real estate in Austin is dynamic and so, simply jumping to a multi-family property may sound overwhelming at first. But, it will save you a lot of time to acquire these properties. All they need is one set of paperwork, one set of loan documents, and one set of a contractor. This way, a lot of fees are saved too. You also get a lot of free time to enjoy or dedicate your time to more deals.
They offer management efficiency –
Multifamily property has its own set of pros and cons. But one of the major pros of investing in multifamily properties is that they offer management efficiency. A management that is consolidated in one location, for many units, means lower management costs and lower time demands. This way, investors can maintain their occupancy to working more efficiently with the contractors. And also improving the maintenance. Every dollar and hour saved in management means a lot more directly added to the bottom line.
As single-family investors experience the pain points and get to know more about the advantages of multifamily properties. They choose to step up this asset to scale up their portfolios efficiently.
They work well with the changing U.S housing market –
Single-family homes face a lot of competition because of higher rents and the need for yields. As a result, the housing inventory is depleting and they are no longer affordable. Increasing demand from retail buyers, funds, and new real estate investors has increased the competition. Therefore, multifamily properties get better opportunities than residential homes.
Growing a portfolio takes less time –
Multifamily real estate is suitable for investors who want to build relatively large rental units. Instead of owning a lot of single-family homes, it is easy to own a unit apartment building. With single-family homes, we need to work back and forth with different sellers and conduct inspections on different houses located at different addresses.
In some cases, this route may also require the investor to take separate loans for each property. You can avoid this entire headache by purchasing one property with different units.
The Bottom line –
The real estate market is changing constantly. Many single-family home investors are now migrating towards multifamily properties. If you are confused about which one to choose for a better investment – single-family homes or multifamily homes, click here. For some, it is a necessity to maintain these yields and deal flow that they have enjoyed over the past few years. While for others, it is to upgrade now they have amassed and get more capital to deploy in the market. Some use multifamily property to get ahead of the curve and build more sustainability to their portfolios.
The advantages to own a multifamily property are endless. Some of it includes – easier access to better financing opportunities, quickly growing one’s rental property portfolio, the luxury of hiring a property manager, and tenant representation.
If you too are a single-family investor who is willing to migrate towards owning multifamily properties. Do not forget to get in touch with GW Partners, a commercial real estate firm in Austin. Their tenant representation services include – Site selections, Lease negotiations, Design Services, and Construction/project management services
Reach out to them now and have a kickass multifamily investment portfolio!