Benefits of Purchasing Multi-Family Homes
Investors consider multi-family homes a worthwhile investment, especially if their purchase gives back to the community. Housing is a major dilemma for some towns and neighborhoods. Improper maintenance could present hardships for families who have lived on the property previously. Taking on a multi-family property gives the investor a return and solves major problems for the neighborhood.
The Owner Could Live on the Property
The multi-family property gives the buyer the option to live on the property. In fact, if they lived in one unit, the individual has access to more lending opportunities. Owner-occupied rental properties meet the guidelines for conventional and FHA mortgages. If the property is in a rural area, the buyer could qualify for a USDA loan if they meet the income limitations. Rental property buyers choosing to live in one of their units could cut down on expenses and operate the complex themselves. This could free up more capital for further ventures.
Generating Residual Income
Rental properties generate monthly income for the owner. Renting out the units gives them a base rental payment multiplied by the total number of units. Multi-family properties give them residual income according to how many units they rented. The earning potential for the property is based on how much they charge for each unit according to the unit’s dimensions and features. For example, the property owner charges a higher rent payment for a three-bedroom unit as compared to a two-bedroom unit.
Providing Housing for Families
By owning and renting a multi-family property, the owner provides necessary housing for families in the region. When assessing the properties, it is important to identify the target market, review previous earning statements for the property, and inspect each unit thoroughly. Rental property buyers can get more information about these opportunities from NRIA now.
Some Mortgages Offer Funds for Upgrades
Mortgages such as an FHA 203(K) provides a mortgage to purchase the property and an allowance to renovate it. Purchasing a multi-family property under market value gives the buyer more money to conduct renovations and add amenities that are appealing to the target demographic. This could include swimming pools, laundry facilities, exercise rooms, and other recreational options. Before securing the loan, the borrower could hire a contractor to provide estimates for the renovation costs. This gives them an exact figure when requesting renovation allowances. The mortgages are accessible if the property needs at least $5,000 in repairs or renovations.
Everyone Shares Amenities
With multi-family properties, all families living on the property share the on-site amenities. If it is a gated community, the families receive security and amenities that are exclusive to tenants only. This could increase the appeal of the property for prospective tenants. If it is condo community, all buyers and renters pay dues for maintaining the shared amenities.
Multi-family properties present investors with a glorious investment with a greater return. Investors could improve an entire neighborhood by providing upgraded housing for locals. With the right plan, the buyer could get steady residual income from the property and give families the housing they desperately need. Buyers can review multi-family properties by contacting an agent now.