For commercial real estate investors, multifamily properties are frequently overlooked as viable acquisitions. Many commercial real estate investors have their sights set on flipping houses, or developing property for shopping centers, hospitals, and other business-focused transactions. However, multifamily properties offer advantages that other real estate investments do not.
Multifamily Properties Provide A Financial Cushion
Flipping houses and developing properties for businesses can be extremely lucrative. Yet the payoff between projects can be months. This lag can cause a severe strain on cash flow. Having at least one multifamily property in your portfolio can provide a more consistent revenue stream to cover financial obligations, as well as surplus capital, while waiting on larger projects to reach completion. Instead of waiting months – and in the case of ground up construction projects, years – to see a return on investment, multifamily properties will keep finances in the black on a monthly basis.
More Is Better
Having a single family rental is wonderful. But if the tenants move on, then that source of revenue dries up until you can find another qualifying resident. Many units in multifamily properties can go for close to the same amount of rent as a full house. This means that a duplex can bring in twice as much as a single family, and larger complexes (depending on the area per unit) can bring in ten, twenty, even a hundred times as much revenue per month.
Commercial real estate investors do not take into account the many local, state, and even federal tax advantages to purchasing and renting out multifamily properties. On local and state levels, there are often tax incentives for investors who purchase and renovate multifamily residences, because the residents boost the economy. Renters want to be near schools, shopping, entertainment, and job opportunities. Most multifamily units are located within reach of these things. As renters take up residence and start working and buying locally, the taxes generated from sales go into the city and state economy. On a federal level, there are tax advantaged for “owner-occupied properties.” If investors take up residence in a multifamily home or building, then maintenance and operational costs can be deducted every year.
If you would like to learn more about the advantages to investing in multifamily properties, call Express Capital Financing at 718-285-0806. We offer a number of accessible commercial real estate financing programs for purchasing, renovating, building, and even refinancing multifamily properties.