Real estate investors within the single-family home sector can certainly find success, and often stick to this field if it remains profitable. After all, why leave something behind if it brings you success and happiness? Investors may feel inclined to expand their horizons however, breaking onto the multi-family real estate investing scene to explore more options. Though they both possess significant differences, the question of which field is the most profitable remains.
Location is perhaps the biggest consideration for investors who are weighing the pros and cons of each. With multi-family real estate, multiple apartments or condominiums are contained within one building, eliminating the hassle of traveling far distances between each property you own. Maintenance is also made easier because of this, as any issues arising on the property can be handled accordingly compared to the many that may come with several single-family homes. Should you as an investor manage the multi-family building yourself, showing vacant units to prospective buyers is much more convenient.
The cost of operating a multi-family residential building is often less than that of a single home as well. Maintenance and the utilities that come with each apartment or condo typically cost less because of size, and a hired management team should demand a lower bill given the shorter trips in between properties. Similarly, any landscaping businesses you hire have much less ground to cover, and thus offer lowered fees. With all of this additional revenue as a result of lowered costs, investors are beginning to flock to multi-family properties now more than ever.
Financing these properties is typically much less difficult. With single-family homes, an investor may be limited based on his or her credit history. Depending on how many homes they invest in, mortgages may be harder to come by. This proves difficult for investors looking to grow their portfolios. With multi-family real estate, multiple investors may be working together within one property, and lenders rarely ask for one’s credit history, instead relying simply on the success of the project they’ve invested in.
Multi-family real estate generally comes with many more positives than negatives in comparison to single-family home investing. While it is not a guarantee that one will find more success in this field, it’s an option worth exploring. Work with the management team of a multi-family residential building that you may be interested in investing in. There are many stipulations that come with doing so, but following them carefully could result in great profit.