One of the things that appeal most to real estate investors is that it allows them to take a much more active role in increasing their capital, than standing by and investing in a fund managed by some other individual. Another big appeal of real estate investing is that there are several different strategies that have proven successful in the past, and can still be used to acquire wealth. Here are some reasons why investing in real estate might be a real benefit to you.
Property Management Makes Sense
As the owner of a single or two-family property, most of the time it probably doesn’t make good financial sense for you to invest in property management. However, when you’re purchasing a multi-family unit, that all changes and the numbers start to be more favorable to you for investing in property management. That means you can divest yourself of all those activities you find disagreeable with managing a property, and leave it to a more qualified individual who actually enjoys doing the work.
Grow Your Portfolio Faster
If you’re trying to build a large portfolio in a short amount of time, building up a group of rental units which are multi-family properties can help you do just that. For example, it’s much easier and much more efficient to purchase a 20-family housing unit than it would be to acquire 20 individual units like single-family homes. Just think of the headaches involved with applying for 20 individual loans, as opposed to securing a loan for one 20-family property.
Easier to Finance
While it would certainly cost you more to purchase a multi-family dwelling than it would a single-family unit, it’s also much easier to finance than a larger property. Banks are aware that multi-family units generate good cash flow on a monthly basis, and that makes them a better risk than single-family dwellings. Even if there are one or two vacancies in a multi-family property, there will still be sufficient income to cover the cost of the loan, and that makes it a much more appealing prospect to traditional lenders.
Looking to invest in real estate?
If so, we may be able to provide financial assistance. Contact us at Monstera Lending Group, so we can consider some options with you for funding that next big real estate transaction you have in mind.