Kanat Sultanbekov Discusses a Few Benefits of Investing in Multifamily Housing

June 21, 2024 rishigatuam1520@gmail.com

In the dynamic real estate domain, multifamily properties enjoy a high level of popularity among investors seeking growth and stability. Newbie real estate investors need to gain a good understanding of what multifamily housing is. Such properties basically comprise of two or more units within the same building. These units can be similar in shape or size, or not. As Kanat Sultanbekov mentions, such a property can accommodate multiple occupants, either as families or individuals. Apartment buildings and duplexes are among the most common examples of multifamily housing properties.

Kanat Sultanbekov lists a few benefits of investing in multifamily housing

Due to their high demand and low vacancy rates, multifamily properties are widely preferred by real estate investors. It especially is a great option for people wanting to diversify their real estate investment portfolio. The benefits associated with investing in multifamily housing are many, such as:

Increased cash flow: Cash flow benefit is one of the primary reasons why people should consider putting their money in multifamily housing. Such housing is in high demand, and hence investors can expect a high occupancy rate on their property, particularly if it is strategically located. High occupancy rates invariably translate to higher monthly revenue. Investing in multifamily housing at diverse locations would especially help investors to boost their monthly cash flow, and enjoy multiple income streams from the same type of investment.

Affordable acquisition cost: When considering the cost per unit basis, the overall expenses associated with constructing multifamily housing are usually more budget-friendly in comparison to many other types of properties. Hence, it is a relatively cost-effective and risk-free investment for newbie real estate investors. Moreover, even if one does opt to apply for a mortgage loan to build or purchase this type of property, they may expect lower mortgage financing rates. The foreclosure rate on multifamily housing options like apartment buildings tends to be lower than single-family units. Hence, mortgage lenders can offer competitive rates for investors of this type of property.

Easier to manage: For a property owner, it would be much easier to manage ten units under one roof than having to handle ten 12 different rental units spread across the city. This is one of the most practical reasons why real estate investors prefer multifamily housing.

High appreciation rate: Even if one does not enjoy immediate cash flow on multifamily housing, these properties still hold their value, which increases over time. While this is true for properties of all types, the appreciation rate is generally higher in the case of multifamily housing. The appreciation rate would largely rely on the location of the property. Hence, investors should make a point to buy properties in well-connected residential neighbourhoods with good social infrastructure. They need to maintain the property appropriately as well. Well-maintained properties enjoy a higher rental price.

As per Kanat Sultanbekov, while there are certainly a few risks involved in investing in multifamily housing, these risks tend to be considerably lower than other types of property investment, including single-family homes. The biggest risk the investors of multifamily properties have to deal with is vacancy rates. However, as they deal with several separate tenants, the chances of zero vacancy are very low. As long as the investor does their research on the location of the property beforehand, they wouldn’t have to worry about the risk of low vacancy.