By Katie Kinney
One of the beautiful
things about real-estate investing is that there are
many strategies that can be successfully used. Investing in rental properties,
or multi-units is a great investment strategy for those who want an additional
source of monthly income, to live for free while your tenant pays your mortgage
and the slow but steady appreciation in the value of your portfolio. In
the current seller’s market, purchasing an investment property may be a
solution to the little to no inventory available. If you have the option to
purchase a single family home or a multi unit, it will just provide more buying
options!
In most cases, if not all, the cost
to purchase a multi-family property will be higher than the cost to purchase a
single-family home The purchase price is off set by the fact that multi-family
real estate consistently generates a strong cash flow every month. This remains true even if a property has a
handful of vacancies or a couple of tenants who are late with their rent
payments. If a tenant, for example, moves out of a single-family home, that
property would become 100 percent vacant. On the other hand, a ten-unit
property with one vacancy would only be 10 percent unoccupied.
When you provide housing it’s a good thing for the community and usually your local government as well. The town in which the property is located likes the idea, because you are helping the residents by providing clean, safe, affordable housing to people who might not otherwise find it. As a result, you can gain all sorts of tax incentives… yes tax breaks! You are able to write off a lot of deductions due to the fact that owning a rental property is a business. You can depreciate many things in an apartment building or rental property, and that depreciation takes place over a lengthy period of time. The tax benefits of owning multi-families can be massive.
Multi-Families hold their value at a much better rate than single-family properties. If the property is turnkey it is very simple to take ownership and continue the relationship with the current tenants. If the property needs to be rehabbed or updated, once that is complete you have created a very attractive property for tenants and you are able to generate higher rents. Higher rents and retaining quality tenants means steady cash flow. This will also attract other investors who could be interested in buying the property, if you decide you ever want to sell.
Buying a multifamily property not only makes financial sense, but can also be a very safe way to make decent money in real estate. When you have more than one unit, the risk is spread out. When one unit goes vacant, you still have the rent from another. If your expenses increase slightly, you can weather it from the other units. As I mentioned above, you are eligible for many tax deductions. If you maintain and update your properties you retain and increase their value. Multifamily properties, if purchased correctly, are a great way to start and continue in the world of investing and I highly recommend it! At the end of the day living in the Greater Portland area is very sought after and people will always need a place to live! <
For more information on buying or selling real estate please free to contact Katie Kinney, Broker, Landing Real Estate. katie@landinghomesmaine.com or 603-205-2276,
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