You may be wondering if acquiring and managing multifamily rentals is a good move for you. Are you motivated to rehabilitate and maintain properties in a healthy and comfortable manner that adheres to local, state, and federal guidelines? Do you have a desire to provide housing that improves lives? Can you imagine the income potential of well-maintained properties? Have you done your research regarding potential investment opportunities in multifamily dwellings?
If you answered yes to some or all of these questions, you may be perfect for the role of multifamily rentals investor. There are lots of things to consider in the field, though, so pay attention.
Investment Costs
The bottom line is that you want to bring in eventually more than you have to put out for the initial cost, rehabilitation, and maintenance. If you choose your property well, rehabilitate it successfully, and charge a fair monthly rent, you should have no trouble at all keeping it rented and turning a profit.
Many people make the mistake of acquiring properties and then leaving them to ruin. The notion seems ridiculous, but the issue is so bad that communities have had to band together to neutralize the effects of such slum lords. Conscientious investors know, though, that the quality homes they provide will be reflected in their reputations and that their investment will deliver greater returns if it is properly maintained.
Owners who take care and time with their properties often find that the resale value is attractive and that their rental value is spectacular.
Growing Demand
The housing market has seen its share of dark days. While the American Dream once focused solely on home ownership, more and more top-quality people are seeking shelter in rental properties rather than homes that may be out of their price range. With an increasing demand for units, investors find that multifamily units are highly profitable and make excellent long-range investments.
Compound Returns
In many cases, investors find that multifamily rentals provide potential for a secondary source of income. Many renters do not own their own washers and driers, and savvy owners will seize this as an opportunity to maximize their returns. Investing in the addition of a laundry room provides an amenity that is very attractive to renters. Where a fair rate can be charged to cover the use of the facilities, profits are increased drastically. In some cases, living quarters have been designed with commercial units beneath them to create a neighborhood feel that helps to add a sense of security to the arrangement.
The question of the profitability of multifamily rentals rests predominately on the owner’s shoulders. “To make money, you have to spend money,” many say. This would be one place that is very evident.