Multifamily home investing has grown dramatically in recent years. In fact, according to Statista, multifamily properties comprised about 42 percent of the U.S. real estate market, and the value of multifamily home investing reached over 487 billion dollars in 2021.
What is Multifamily Home Investing?
A multifamily home is defined as a single building structure that is divided to provide separate living spaces for more than one family or set of occupants. These include duplexes and triplexes, condos, townhomes, semi-detached homes, and small apartment buildings which have up to four individual units. Structures with more than four units are generally considered to be commercial properties.
Why Multifamily Home Investing is Attractive
Multifamily home investing is attractive because it can be a great way for beginning real estate investors to get started buying properties that can generate significant income without the more significant financial and operating challenges of commercial real estate investing.
Multifamily home investing offers the potential to establish recurring revenues and generate net operating income. Plus, over time, these properties generally increase their value, producing a significant profit when it becomes time to sell them. This is a great way to diversify one’s investment portfolio. And, for some, it represents a way to reduce living expenses because an investor can occupy one residence while renting out the others.
A Beginners Guide to Buying Multifamily Home Properties
Follow these steps to find success with multifamily home investing:
- Develop a budget. Consider renovation costs, ongoing maintenance costs, closing costs, and carrying costs.
- Examine the types of multifamily properties and decide what you want to undertake.
- Find an experienced real estate agent.
- Research potential neighborhoods and review potential properties.
- Choose your first multifamily home property.
- Choose a lender and get a pre-approval letter.
- Estimate your potential profits and losses.
- Make an offer.
- Get financing and close on the property.
Seek Expert Financing Assistance
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