What are the benefits of multi-family properties?

Multi-family properties are buildings with more than one unit. A multifamily could be as small as two units, a duplex, or  hundreds of units in a large apartment complex. Most real estate investors own multifamily properties only to rent them out to those who can’t or choose not to buy a single-family home. rarely do you see people buying a multifamily to live in.  Investors need to understand the many benefits that come with owning a multi-family property so they can decide if it’s the right decision for them or not. So what are the benefits that come with owning a multifamily property?

1. Easier management

Whats better owning 10 single family homes that are distributed  across the city to mange and control or 10 units under one roof? With multifamily properties managing is a lot easier and less time consuming and not so tiring like single-family units. With the 12 individual properties, you may need more than one property manager; with the one building you only need one manager.

2. Forcing Appreciation in Multi-Family Properties is a lot Easier 

You can’t just depend on time to make a property’s value increase. You have to do certain things to force the value of a property up or improve amenities and benefits to tenants which will increase the property’s appreciation. In multi-family properties, investors are able to see the returns on renovations  a lot faster than in single-family properties.

3. You Can Create Even More Cashflow in The Multi-Family Property

This is pretty exciting stuff, because there are ways to create cash flow beyond rent. In multi-family units, you can charge for extra amenities such as a laundry facility. Tenants who don’t have washers or dryers in their unit can use this laundry room and you will benefit by generating more cash flow. The laundry room is just ONE thing you can add. There are many more amenities to add that bring additional cash flow in a variety of ways.

4. There Are Great Tax Breaks that Come with Investing in Multi-Family Properties

Whats better than providing housing for so many people? And with every good deed done comes a reward. At least that’s what the government thinks so. Because you are helping the residents of that city by providing clean, safe and affordable housing to people who might not otherwise find housing, you should be rewarded.  As a reward, you can gain all sorts of tax incentives, also known as tax breaks. You can take a whole lot of deductions because this is a business, and many things depreciate in an apartment building.

5. Multi-Family Properties Hold Their Value

Once the property is fixed up and you’ve made it attractive to tenants, it will also attract other investors who will be interested in buying the property later if you ever want to sell. You’ve put in place everything required to attract and retain tenants. That means steady cash flow, which is quite appealing to investors.

With that being said, let us now answer our main question “how to calculate returns for a multi-family property?”