When you have reached the level of competency and confidence to handle multi-family property investment, it is best that you seriously consider this strategic investment shift. Seasoned real estate investors usually graduate to this type of investment option to improve their cash flow and earnings. This goes beyond the opportunity of receiving higher rental earnings as a result of a greater number of units for rent. The earning opportunity is associated to economies of scale. This means that with higher number of rental units in one location, there will be more opportunities to cut cost through several means.
• Savings in Repair and Maintenance
The unit cost for repair and maintenance can be significantly reduced in multi-family property investment whether you are contracting the volume work from a service provider or hiring your own in-house service personnel. If you will consider the savings that you generate over a period of time, the amount will definitely be very significant.
• Upgrades and Purchases
Whether it is brand new painting units or refrigerators, you can leverage for better deals and discounts from suppliers and dealers when you negotiate for volume purchases. The potential number of units to be purchased is one great equalizer for property investors to clinch good deals and substantial cutbacks on the purchase price. With this significant leverage, you achieve a certain degree of clout when dealing with dealers and suppliers of furnishings, appliances and other items that you will need in the operation and maintenance of your property.
• Property Insurance
Building apartment units is less expensive than building single detached homes. Thus, it is logical that the property insurance will also be lower for the former. In addition to this built-in advantage of apartment units, there is also that leverage of owners of multi-family property investment when negotiating for insurance. With apartments, you will only have one single policy to cover all the units of your apartment property. The significant reduction on the price of the property insurance is due to the distribution of the overhead cost to a greater number of units compared to individual single detached units where each will have to bear the brunt of the full amount of the overhead cost.
Financing Options for Apartment Property Investments
Capital requirement for a property investment of this scale is one of the major challenges. Property investors must really need to have deep pockets if they intend to enter into this kind of venture. Property construction is not easy and it requires substantial amount of capital. In most cases, not many people have this amount of money available to start such a big project. However, with proper planning and careful management of available finances, one can avail of financing to support multi-family property investment. Those who don’t have sufficient amount of capital can opt for multi-family property refinance loans.
You can check out potential financing programs for your property investment online. You can easily get a quote for a particular loan amount in addition to the details and terms of the financing programs on offer in these websites. This makes it easier for property investors to shop around and weigh their options without having to physically coordinate and consult with all these banks and mortgage companies. It also simplifies the process as you already have all the information that you need at your fingertips, and you can confidently make your decision and come up with your short list of choices or options.