Real estate investment is a great option for passive income and it also diversifies your investment portfolio. With so many different options when it comes to real estate investments let’s take a moment to go over our top 5 reasons as to why multi-family housing might be the best choice for you!
- To start, more people are expected to be renting over purchasing a house or condo. This is due to rising home prices that are keeping potential buyers from taking the next step — and some investors say it could be good for the rental market. Multi-family housing investor, Grant Cardone, told Yahoo Finance, “Homeownership is still dead in this country because the only people that are buying homes right now are people that have equity, great credit and a job.” In addition to this, rent prices slid this summer making apartments even more desirable and attainable for Americans.
- The coronavirus pandemic has caused the closure of many businesses and left millions unemployed. For those invested in single-family homes, there is the issue of their tenants being unable to pay rent as well as having vacant properties for months at a time. With multi family homes, there is limited risk as there are a multitude of tenants so even if one or two of the units are vacant, the other units provide a financial cushion.
- Our next reason has to do with choosing a reliable investment. According to Forbes, history shows that multifamily real estate holds strong through economic uncertainty. In the past two recessions, multifamily outperformed all other major forms of real estate. Rent recovery after the recession was also faster. With today’s current economic uncertainty, you want to invest in properties that can succeed in all economic climates.
- You can grow your investment portfolio much faster! Instead of needing to be approved for 50 different single family home mortgages, it’s much more time-efficient to be approved for one loan for a 50 unit apartment complex.
- Finally, you see a more consistent return with multi-family housing as the rent-to-price ratio is usually better in multi-family residences than with single family homes which provides you with a greater monthly cash flow. The more consistent income you have the easier it will be for you to reinvest and grow your portfolio as well as have some extra cash