Luxe Crowdfunding in Florida knows that a multifamily investment property can be very beneficial for your portfolio, but it is important to understand what to consider. As a platform for real estate crowdfunding, we know firsthand the benefits that a multifamily investment can have, but it can be difficult to understand what advantages it could have over single-family properties. Here are some things to consider when you are looking to invest in a multifamily property.
Vacancies & Tenants in a Multifamily Investment
The fact of the matter is that a single-family home only allows for one set of tenants to occupy the property at a time. This means that if the property is not occupied after one set of tenants leave, you will be responsible for the mortgage for those months while you search for a new occupant. The vacancy may vary and the costs may begin to outweigh the actual investment of the property.
On the other hand, multifamily investments give you the opportunity of having more than one tenant. This means that you will typically have people cycling in and out of the property, and you should have a steady stream of cash coming in at all times. While you may be missing 10 or even 25% of the mortgage to be paid on the property, it is still far better than missing 100%.
Loan acquisition is a big part of any investment. Whether you opt for a single-family property or not, you will likely be subject to the loan application and acquisition process. The loan process for a residential property is much simpler than the one for a commercial loan. You also have to consider that, with a commercial loan, you will have to show business management experience as well as answer questions on tenant responsibilities. This may seem like a lot, but the benefits are well worth the in-depth process.
This is because, with one loan, you can acquire any number of units in one property, thereby growing your portfolio exponentially more quickly than you would be able to if you sought out multiple single-family properties and applied for individual loans on each of those.
Maintenance costs are another significant thing that you must consider when you are seeking out an investment property. While single-family homes may seem more appealing on the surface with regards to maintenance costs, this is actually not the case. A multifamily investment can potentially be lower. This is because, if one building is holding more than one unit, the actual cost to maintain that building versus the costs per each unit could be lower than the costs of maintaining one unit in one home.
Luxe Crowdfunding is a real estate crowdfunding platform that has properties in Chicago and Florida. We pride ourselves on providing our clients with the best investment opportunities to help them diversify and expand their portfolio and see return on their investment as they haven’t seen before. To learn more about what we can do for you and how real estate crowdfunding works, contact us at Luxe Crowdfunding today.