Investing in multifamily properties can sound like a ton of work. Although there are definitely some challenges to making sure such properties are properly run, this type of project can also be quite rewarding, both financially and emotionally. As an investor in multifamily housing, you have the opportunity to spruce up poverty-stricken neighborhoods and bring a stable living situation to families who have previously known only boarded-up windows and poorly managed apartment buildings. In addition, you’ll be setting yourself up for a solid source of income, since housing (and especially affordable housing) is in short supply in nearly all of the country’s major cities. Your property will very likely be full most of the time.
Why is investing in multifamily properties so much more lucrative than single family properties? For one thing, you have just one building to deal with for multiple tenants. Although each individual or family renting one of your units could potentially present challenges, the issues related to the building will be relatively similar for all tenants. If you were to invest in the same number of single family properties, you could have drastically different issues to deal with for each of the properties you own. Solving one issue in one building won’t do a thing to help you with the next building’s issue – you’ll just gain experience and know-how. When there’s just one building in question, however, solving a problem reported by one tenant often helps the other tenants too. Perhaps someone will point out that a hallway is dirty or that the elevator is broken. Taking care of these things will result in a positive experience for people renting out several, if not all, of the units.
Perhaps the most important thing to think about when trying to make money from multifamily properties is finding the right property manager. As the owner, you won’t want to be dealing with maintenance and rent collection yourself. However, you definitely need to know that you can trust the person who takes over these tasks for you. It’s important to interview all the candidates thoroughly and make sure that their expensive is lengthy and solid. You’ll also want to have an alternate candidate in mind in case the first person or company that you hire doesn’t work out.
Owning multifamily properties can be a challenge, but if you have a trustworthy property manager and a desire to provide people with a good living space, you’re likely to find the experience both emotionally rewarding and lucrative. Remember, the overall effort required per tenant is much less than that with a single family home.