Nationwide Property Services, Inc.
Specializing in multifamily acquisition, syndication and management.
Usually on the weekend, I take a couple of minutes in the middle of the day to review my emails, and came across this article, Why the Wealthy Put Their Money Into Multifamily & Commercial Real Estate, by Jered Sturm. Its definitely worth a few minutes of your time to read through the article.
Why the Wealthy Put Their Money Into Multifamily & Commercial Real Estate
Have a great day!
We really like multi-family properties over single family for a several different reasons….
* Vacancy impact – If you have a 20 unit property and one unit is vacant, you still receive 95% of your rent to pay the expenses. When a single family property is vacant you have no rental income coming in to pay your expenses.
* Cost per unit – You typically are paying between $20,000 to $40,000 per door for multi-family. It is often difficult to find quality homes in good neighborhoods in this price range.
* Economies of scale – Multi-Family means just one roof, one loan, one insurance policy, one HVAC, one property tax bill, one lawn to maintain instead of multiple roofs, loans, insurance policies, HVAC units, property tax bills, lawns, when you own multiple single family homes.
* Net Operating Income – Multi-family is valued based upon the net NOI (income after expenses) which removes emotion from the equation.
* Complexity – The added complexity of acquiring multi-family properties actually works in your favor. Acquiring a single family property is fairly straight forward. Successfully acquiring and operating a multi-family property requires additional skills beyond those of the average real estate investor.
There are also negatives, besides the complexity, there is less inventory available to choose from, and you are competing with other professional property management firms.
Fortunately, if you qualify to invest in properties with our firm, we provide professional acquisition and management of the asset. We take those difficult and time consuming tasks away from the investor making apartment investing with our firm a truly passive investment.