It is well-known that a great many investors have accumulated considerable wealth through real estate transactions. One of the transactions with the greatest return is investing in a multi-family property because you have several tenants paying rents concurrently, which increases your incoming revenue. Here are some tips on how you can save money with your multi-family property investments.
Buy Properties with Greater Tenancy Potential
Banks are much more inclined to finance multi-family properties than they are to finance single-family buildings. This is because if a tenant moves out of a single-family building, it becomes 100% unoccupied, whereas if one tenant moves out of a building that houses 20 tenants, the building would only be 5% unoccupied. In other words, it’s a much less risky investment for a bank to finance the purchase of a multi-family property than it would be for a single-family dwelling. This means it’s to your advantage to find a property that can house a greater number of tenants.
Hire a Property Manager
It might seem like hiring a property manager would be an expense that you don’t want to incur. However, when you consider the fact that without a property manager you would be personally obliged to commit your time and resources to all kinds of maintenance and repair requests, a property manager seems more attractive. In the long run, you could actually save money by hiring a property manager to handle all tenant relations for you, so that you can be free to devote your attention to more important business.
Purchase Large Units
By purchasing large multi-family properties, you can build up a portfolio much more quickly than you could by purchasing smaller establishments. For instance, consider how much more quickly you can build up your portfolio by purchasing a 20-unit apartment complex, as opposed to purchasing 20 separate single-family dwellings. In the latter case, you might also have to apply for 20 different loans, whereas with a single large multi-family property, you would only have to apply for the one loan.
Need funding for your next real estate investment?
Don’t let a lack of funding cause you to miss out on some real opportunities in real estate. Contact us at First Source Capital so we can discuss some options with you for funding that next big real estate transaction.