What is currently drawing single-family home investors move into multifamily investments? What are the pros and why is it so appealing? Find out the five reasons why multifamily apartments are hot right now
Fits with the changing market
In the U.S, rents and a need for margins have created even more competition for single family home investors. There is a low inventory on viable properties to invest in; which hurts the affordability of the investments. Bidding wars happen all the time. For some individuals, this is pushing them to find great opportunities in the multifamily space.
Efficiency of management
When all of your management tasks are consolidated to one location, this reduces hassles, your time investment, and costs. Multifamily units can offer returns in many ways, including maintaining occupancy much more easily to efficiently working with vendors. Every penny you save means you save on your bottom line. Multifamily portfolios allow for investors to scale more quickly and more efficiently.
Investors can save time
The time required to acquire a multi unit apartment building vs. the same amount of single family homes is less time consuming and less work. I’m just saying this from experience. Taking on a multifamily deal may sound like a lot in the beginning, but it’s faster and less intensive than picking up properties one-by-one.
Lead to higher ROI
Renovating and improving properties can be a big challenge to real estate investing. Flipping homes can be fun, profitable, but it is risky sometimes. In a multifamily unit property, improvements can lift the appeal and value. You can then demand higher rents in general; which elevates the ROI. Multifamily units can also be positioned more easily, based on the market, than single-family homes.
More direct control
For a single-family home, the worth of the property is directly connected to surrounding comparables. The great thing about multifamily properties, and why they are hot right now, is because the investor has a direct control over the value.
Summary
The market is always— and will always be— changing. Many single-family home investors are leaving that market and moving to the multifamily market. For many, that move happened out of necessity. For others, it is part of an “upgrade strategy.” Some use multi family homes to get ahead of the curve and increase sustainability into their portfolios.