Is A Multi-Family Home A Good Investment For You?
Posted on: 20 April 2016
Buying an investment property can help establish your financial future. Some investors are opting to forgo a single family home investment and purchase a multi-family unit instead. If you are considering a multi-family unit, here are some pros and cons to weigh.
Advantages
The obvious reason to invest in a multi-family unit is that you have an increased likelihood of having some sort of income generated by the property. As a result, you have more money to devote to property issues, such as repairs.
You also have the benefit of having all of your units in one convenient location. Instead of traveling from location to location to collect rent and perform maintenance, you will have one location to tend to.
With a single-family unit, you still have to worry about maintaining your own residence. If you invest in a multi-family unit, you have the option of living in one of the units. Living on the property also gives you a chance to address concerns right away before they worsen.
Multi-family units tend to be always in demand, so you should have very little trouble finding the right renters for your home.
Disadvantages
Although there are some benefits to a multi-family unit, there are a few drawbacks. For instance, if you live on property, tenants have the opportunity to voice complaints at anytime. Although this can help you stay ahead of issues, knocks on your door could come at inconvenient moments.
Due to the cost of a multi-family unit, it is possible that you will need to provide a larger deposit than if you bought a single-family unit. You also have to worry about the upfront costs of ensuring each unit is ready to be rented. It could prove to be expensive and, as a result, place you in a financial bind in the earlier stages of ownership.
Another possible issue is that you have to foot the cost of maintaining the common areas. If you have a pool, playground, or other area, this can quickly add up. However, you can sell this as a perk to tenants and address the rent to account for those amenities.
There are many more pros and cons to consider when deciding whether or not a multi-family unit is the right investment for you. Consult with a realtor and lender to learn more about the investment process so you can assess whether it is the right choice for you. Contact a company like Prime Realty to get started.
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