Investing in multi-family property is a sound investment as long as you know what to expect from different multi-family residential properties. The biggest advantage of buying multi-residential property is that you not only get a home to live in but also extra units you can rent out an earn money from.
Multi-family properties are real investments.
By definition, a real investment is something that actively gives you money. Even though a single home might appreciate in value over time, the fact that it doesn’t actively generate income sidelines it to some extent. Multi-family mortgage loans give you a better real investment.
Multi-family property is a game changer since you will be collecting rent each month. This means that you don’t have to resell your property to recoup your investment hence making it a wiser decision to someone who is keen on breaking even and making profits faster.
Use the rental income to qualify for a loan.
The other most interesting thing about the multi-family dwelling is the power to use the expected rental income as part of your mortgage underwriting. Some of the lenders will let you do a market analysis to estimate expected rent while others will only explore this option the moment you have renters in your property.
Even if you don’t use the income to qualify for the loan, you can still use the rent you collect to pay off the loan faster by overpaying your monthly premiums. Either way, the multi-family property investment will prove to be a wise and active investment, especially if you choose your neighborhood wisely.
The most important thing you must get right when investing in multi-family property is finding the right neighborhood. A neighborhood will not only determine how much rent you can ask for but also whether there will be willing tenants. Look for a middle- to high-end neighborhood that tends to play host to temporary or semi-permanent residents who would sooner rent than buy.