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Multifamily Real Estate

The stability of multifamily properties can be summed by the simple fact that people will always need a place to live. Because multifamily properties house multiple people there is a lot less risk when compared to other asset classes. If you are running your building well you shouldn't be worried about all of your tenants leaving. If one or a few leave you have the added security of other tenants to keep your property cash flowing while you find replacement tenants. Whether you’re a seasoned real estate investor or a first time buyer your next purchase should be a multifamily property.

For first time buyers, small multifamily buildings (2-4 units) offer the perfect opportunity to break into the real estate investment world. Residential loans are available on multifamily buildings 2-4 units, thus allowing buyers to put a smaller downpayment and in turn making it a more accessible investment. One lesser known option is to buy a 2-4 unit building with an FHA loan and live in one of the units. This is likely the cheapest way to become a multifamily owner.

As investors start to hold more property, they will likely see higher returns on buildings with 5 or more units. On multifamily properties 5 units and up a typical down payment is around 35% with some investors opting to put more down. This costlier entry point prices out many smaller investors but with less buyers the listing prices become more competitive.

Commercial real estate is a great way to invest money in a tangible and inflation resistant asset. Multifamily is the ultimate blue chip investment due to its necessity, steady rent growth, and the overabundance of renters. Multifamily properties are a safe and relatively cheap way to get into the real estate market for first time buyers. For owners with more real estate holdings, multifamily properties offer a reliable foundation to further expand portfolios.

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