Multifamilies homes are a good investment but they are not for everyone. There are reasons multifamilies make good investments. Like all real estate, over time they appreciate in value. After the debt is paid off there is good cash flow. The loan amortizes overtime and in effect, the tenants pay the mortgage and in some cases, the depreciation taken can reduce overall taxes paid.
Lowering your risk profile is another significant benefit with multifamily home. With a single-family rental unit, it is either occupied or it is not. That means, if you have a mortgage, you will need to cover the cost of the mortgage (and other expenses) without a rent payment coming in to offset the expense. With multi-families, there are more tenants to cover your mortgage and other expenses. If you own a 12-plex and three tenants have moved out, there are still nine paying tenants. This provides protection for the investor.
Multifamily properties generally have a much higher price tag than a single-family home. It is not uncommon to expect to put down 20 to 25 percent on the property. The payment is also larger because you are not living in the property and it is seen as more risk. Additionally, you must be prepared with cash backing or cash reserves. In most situations, the conditions just mentioned apply, but this is not always the case.
If you are looking to enter the multifamily market check out our listings
Darcy 250.565.5036
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