The More the Merrier! 5 Lucrative Benefits of Investing in Multi-Family Real Estate

multi-family real estate

The research is in. Investing in real estate generates more wealth than any other investment option. Want to build your net worth without wasting valuable time or risking traumatic monetary losses?

If so, multi-family real estate may be the perfect investment option for you. Let’s get into the top benefits.

1. Scalability 

All successful business owners understand the undeniable importance of scalability. While it may seem like a safer bet to invest in a single property, this decision may not be very safe at all.

Think about it. Each individual property needs individual servicing and attention. You need to take care of all the nuances of homeownership like maintenance, landscaping, dealing with evicting tenants, etc.

When you scale up, the per-unit expenses go down. Less maintenance, fewer lawns to mow, and no driving around town to meet with different tenants.

2. Reduce Tenant Risk

A single-family home may be great- when you have tenants. But what happens when the house goes vacant, and the mortgage still needs to be paid?

If, on the other hand, you own a multi-family home, you build a diversification strategy naturally. Multiple tenants are forking over rent payments- this can help you float even if one of the units goes vacant.

3. Less Start-Up Effort

Let’s say you want to buy four houses to rent. Think about all those different closing costs, offer letters, and dealing with various agents and sellers. Think about all the work you need to do before you even own the property.

Compare that effort to that of owning a multi-family home. With this strategy, you visit one property, collaborate with one owner or seller, and engage in a single closing. That’s less time, money, and overall headaches for you!

4. Excellent Tax Breaks

As it turns out, the government rewards real instate investors with some attractive tax incentives.

For example, a major multi-house unit is going to come with serious deductions like depreciation. The depreciation can take place over two or more decades depending on how the property is classified.

To take advantage of these tax breaks, it’s best to work with a CPA who has ample experience in real estate. A CPA can help you save tens of thousands of dollars on your investment each year.

5. Faster Rent Increases 

Multi-family properties can adjust with current market conditions, which means they change according to inflation and market demands.

Multifamily leases are typically a year. Commercial real estate, on the other hand, often have 5-year leases. This short-term lease means that you can raise the rent more quickly and consistently according to market conditions.

Translation? More money for you! And you’re also keeping your property competitive on the current market. 

Final Thoughts On The Benefits of Multi-Family Real Estate

Multi-family real estate is one of the best options to diversify your assets and grow your wealth quickly!

Want to learn more about renting out property like a true professional? We have you covered. Check out this property management guide today.