Landlords debate the merits of different properties endlessly. Few doubts remain, multi-family properties present too many benefits. Compared to traditional units, these are income-redundant and cost-effective. Thus, for an investment of similar size, your returns should ideally be greater.
Multi-Family Homes Have Income Redundancy
What happens if your single-family rental goes vacant? Every landlord’s worst nightmare, vacant homes don’t generate any revenue, costing more than they earn. Multi-family properties are rented by the unit. So, as long as someone is in there, you’ll keep collecting rent.
As Long as One Unit Remains Occupied, Cash Keeps Flowing:
Sure, that single unit won’t equal a fully-rented property. But, it’s a lot better than nothing, which is what you’d get from a single-family vacancy.
Mitigating Risk Hedges Against Downsides:
Having that extra unit is like adding an extra layer of kevlar to your vest. Something might still happen, but at least you’d have better protection.
Fewer Repairs Means Costs Are Distributed
Eventually, something will break in every property. How you handle them depends on where it’s at. Let’s say you had a problem at a single-family home. In that case, you’d have to address it even though it only affects a single tenant.
A Single Roof Covers Multiple Tenant’s Heads:
Multi-family properties operate differently. A single roof literally covers multiple heads, distributing expenses in the process. Whatever happens to the home, a single fix will solve everyone’s problem.
The Same Can Be Said of Central AC Units:
Even an air conditioning unit can cool multiple units. Spending less time repairing all your properties saves both time and money. Ultimately, those are what impacts your bottom line the most.
Property Managers Get to Focus Their Efforts
Even property managers save time with multi-family properties. They’ve got less ground to cover when they make their rounds, speeding everything up. Not only does this benefit them, but it also benefits your tenants. They’ll see the managers more often, who can help them with anything they need.
Fewer Miles Means Lower Travel Expenses:
Not to mention, the cost savings can be substantial. Driving around to a bunch of single-family homes tends to add a lot of miles to your wheels. All those miles add up rather quickly, too.
Property Appreciation Might Be Even Greater
Multi-family properties are often larger than single-family homes, meaning theirs more opportunity for appreciation. As a result, even owning an unoccupied multi-family property could be more lucrative. Larger homes appreciate at a higher rate most of the time, so you’ll have more to gain.
Managing a Multi-Family Property
When you start managing properties for the first time, it can be a bit overwhelming. We’d love to help you each step of the way. Figuring out how to maximize your cash flow takes a little time, but in the end, it’ll be one of the most worthwhile things ever.
Alex Capozzolo is a partner of Shawn Buys Houses KC, a house flipping company based in Kansas City, MO. Shawn is a licensed realtor, and flips homes full-time. He enjoys swinging a hammer and making a house shine.