When asked about best strategy for real estate investment, most of the smart investors will suggest buy & hold strategy. This is a great strategy from investment point of view that gets even greater with multifamily properties.
Investment in multifamily property may not be a “get quick money” kind of a strategy but it is the best long-standing solution to make money through asset management real estate. Additionally, there are multiple benefits of investing in a multifamily property as compared to single family homes; the major ones are:
Greater Cash Flow
Since you can have multiple families occupying your property, you will also have multiple rents flowing into your account from a single property. And for obvious reasons, income from a multifamily property is always greater than the income from a single home.
Lower Risk of Vacancy
In case your single tenant of the single home moves out, you will not have any rental income with negative cash flow until you get another tenant; whereas, if one family moves out of your multifamily property, you will still have rents coming from other tenants. You will still have some negative cash flow but it’ll not be as bad as having zero rental income.
High Potential for Property Management
Since you will have greater income, you will be in a better position to hire investment property management services to find suitable tenants and to manage regular aspects of property management. Asset management real estate companies can also help you to manage your investment.
If you invest in 5 single homes, you will need to manage 5 different properties at 5 different locations to get rental income. On the other hand with multifamily property, you can earn equal or perhaps more rental income by managing a single multifamily property. This means you will need your investment property management team to maintain only one yard or one roof. Thus it remarkably reduces the risks.