When you choose to invest your money, most people’s first inclination isn’t to invest in rental properties, because well, they can be a lot of work for the investor. But if your investing is done the right way then it isn’t as much work as one would think.
In this week’s blog, I want to tackle the misconceptions that surround investing in a multifamily property, because there are a few that we want to invalidate today.
The first one is that they are just to expensive.
As an investor, you are not the only person putting money into the property. When you are investing in a property, like an apartment, you will technically be getting the property for less than what you would be paying for a single-family home. When you purchase a larger property with multiple units, you are technically adding more property to your portfolio. Also, when it comes to a multi-family property, there are more ways for you to be able to invest then what you would be able to do with a single-family property. You can go through a few different ways to obtain financing for the property. You can obtain a conventional bank loan, a private financing option, and you could even go through companies that will allow you to purchase fractional shares of the property or multifamily-focused REIT and gain exposure to this asset class with just a few thousand dollars of investment.
Another misconception is that vacancies will ruin profit. When you have a single-family property, you need to have a property filled all the time in order for there to be any type of income on the property. On the flip side, with a multi-family property, because of all of the tenants that are present there are multiple streams of revenue coming in at all times and a vacancy here or there will not be the end of the world until a new tenant can be found.
The final misconception is one that most people worry about in general, even when they aren’t an investor, which is maintenance. When you own something in bulk, like an apartment building, you will come to the realization that there is a benefit in having one large property with multiple units. You are able to have a team of 2-3 people for maintenance and it be in the budget for the property because there is an increase in production for the property because of all of the avenues of income coming in.
Interested in becoming an investor after the debunking of all of these misconceptions? Reach out to us at info@pqpllc.com
