Investing in real estate is a good decision. However, without a strategic approach, you may not be able to make your deal profitable. The biggest question is- What type of property is good for your investment? Several real estate investors target multifamily homes. But, every investor has a different goal, and that’s why you have to know everything about multifamily properties before taking a step.
Most importantly, you can talk to Behrooz Davani, the Meilleur courtier à Montreal.
Defining a multifamily home
It is a residential building that has at least 2 units. There is no ground-to-roof wall to separate these units. To buy multiple-family homes that have more than 5 units, you need to apply for a commercial mortgage. That is why it is costlier than a standard residential loan. However, those who like to invest in commercial real estate can prefer multifamily property. Buying a multifamily building is easier than purchasing a hotel and office.
Regardless of the number of units, each of them should enable residents to have self-sufficiency. There must be separate entrances, bathrooms, kitchens, and utility meters.
Multifamily properties of different types
Based on the number of units, the multifamily property can range from duplex to quadruplex.
- A building with 2 stories and 2 units joined by a wall is known as a townhouse.
- A condo contains several units, and the interior of a unit is owned by a separate person.
Is a multifamily home the right choice for you?
When you cannot make a decision, you can consult Behrooz Davani. The professional broker will give you the best guidance.
Most commonly, multifamily homes are suitable for-
- New investors who are looking for a smaller multifamily home
- Efficient investors who need multiple rental units to have a consistent cash flow
- Large families with members of multiple generations
What are the pros of investing in multifamily properties?
- Multiple investment opportunities
There are different ways to invest in a multifamily building. While some investors buy it individually, others like to partner with another investor. By diversifying your holdings, you can mitigate your risks. The best fact is that multifamily properties attract several investors.
- No loan issue
You can buy a single property with a single loan. Compare buying 10 single-family rental properties to investing in a 10-unit condo. The latter will need a single loan. But, for 10 single-family homes, you need separate loans. As a first-time investor, you will not feel confused.
- Insurance is less complicated
Like a financing, insurance does not involve several complications when purchasing multifamily homes. The presence of several rooftop terraces and other amenities can make your insurance policies too confusing. With the growth of your multifamily portfolio, you can easily avail a single blanket policy.
- Takes less time to grow your portfolio
Property investors who think of developing a big portfolio of rental houses can invest in multifamily real estate. It is easier to acquire a 20-unit apartment building within a short time. You do not need to buy 20 separate single-family houses. It would be less time-consuming to inspect 20 houses, as each of them does not have different addresses.
- Manage properties without a hassle
Some property investors do not like to take part in property management activities. They hire property managers for everyday operations. Thus, you can hire a single manager to deal with your multifamily house. He will help you in every way-
- Collect rental payments
- Screen tenants
- Manage evictions
- Maintain the property