Disclaimer: The author has no affiliation with any of the products, services or companies discussed in this article.
Investar USA has a lot of experience with real estate. What are some of the benefits of investing in a Multifamily Housing Space? There are three types of multifamily. First is the residential composed of 2 to four units.
Next, small apartments with five to seventy units. And last, commercial multifamily with seventy to three hundred units. The best one for them is the commercial type since this has to have professional property management. Here are some of the few reasons why according to them, this is a good idea to invest in a multifamily housing space.
Always in Demand
There are three hundred twenty eight million Americans according to worldometers.com and that means there is a lot of demand for houses. It is one of the human’s basic needs that needs to be fulfilled.
Professional Property Management
Since we are dealing with a large number of units, there should be a professional property management within the building to take care of the everyday running of the business. For example, the project may have one onsite leasing manager to take care of the activities of the leasing operations department.
Your project may also have one service technician to provide customer support immediately. Having a Professional Property Management will make your job easier because they have to do most of the work for you while you invest in more properties like this.
Appreciation over the course of time
It is the increase in the value of the property through the increase of NOI or Net Operating Income. Your tenants will be very happy to see where they spent their money on because the price for housing always increases. They will see that the price that they paid for is worth it.
Cash Flow
With multifamily, we should focus on rent growth and increasing the net operating income. And over the course of time, rent will increase and so will your net operating income. You will get monthly or quarterly net income from the property, and you can safely achieve five to nine percent in annual net income.
Value Add
Doing very specific improvements to a property will also increase the value. Since people are looking for ways to entertain themselves, adding amenities will add appreciation to tenants and more cash flow for you. These amenities may include but are not limited to swimming pools, gyms, landscaping or even upgrades to the actual units.
Tax Benefits
Real Estate has always been one of the most tax advantaged asset classes. You can get tax-free income, tax-free refinance capital and tax-deferred capital gains. With real estate, you can borrow cash with tax free loans through refinance. You can also shelter cash flow using similar properties using tax-free exchanges, also referred to as Section 1031 exchange. You can buy a another property without paying tax on the sale of the first property.
There are a lot of benefits from investing in a Real Estate like a Multifamily. No wonder most people who invest in it make a lot of money.
