4 Great Benefits from Multi-Family Investments That Single-Family Homes Don't Have

Which is better? A single-family home investment or multi-family property investment? Both have pros and cons, advantages and disadvantages but there are some great benefits to a multi-family investment than a single-family home investment. From our experience here are some of the great benefits of multi-family property investments.

#1. They take a less work to buy.

The expense and time it takes to acquire 10 single-family home investments as opposed to one 10 unit complex is benefit enough. Imagine doing 10 different deals rather than just one and getting the same rate of return. Even if you bundled several homes together, there still multiple closings and inspections. With one property split up into different units, you negotiate with one seller for terms, price, and closing.

#2. Spreading out your risk over more units.

If there's one home and it goes vacant for a few months, you'll be paying the mortgage. But, by spreading out the risk on several units and one or two of those units become vacant, there's other income from the other occupied units to cover expenses. Multifamily properties allow the investor to limit their downside risk by having multiple tenants pay expenses.

#3. Appreciation.

Single-family homes are purchased based on the sales approach or the comparable properties in the market the drive the value of the property one way or the other. Multifamily properties are purchase using the income approach, meaning how much income you're likely to get from the occupancy of all the units involved. You have much more control in a multi-family property to technically "force" the appreciation of the property by driving up the net operating income. You don't have to wait for the market to drive up the value. It's easier to generate wealth in a short period of time, and it's one of the most important distinctions between a single-family home and a multifamily property

#4. Less competition.

Most investors go for the single-family house, especially as their first investments. So, you usually won't have a lot of competition because there is more money involved but lower risk overall. Many investors also unknowingly think they can't enter into the multi-family investment world and it seems scary and daunting. Use this to your advantage. [Source]

Consider the benefits to multi-family. You could be greatly rewarded with excellent returns not only short term but in the long run as well. Call us for information on multi-family properties and units in the Minot area. We specialize in commercial property and would love to help you find the right investment for your needs.