Here’s Why Investors Love Multi-Unit Properties

If you can’t stand the stock market volatility, why not consider investment property in Herriman, Utah?

Real estate investing also gives you a more active role in growing your business, unlike stock investment, where your funds are managed by someone else.

You can apply various strategies, like developing residential or commercial properties or acquiring rental properties. Other investors are into flipping houses, buying properties that need renovations, and then selling them for a profit once they are done with the makeover.

Let’s zero in on one of the most preferred investment strategies for those who want a consistent and steady appreciation in their portfolio: multi-family properties.

What are multi-family properties?

Multi-family properties have more than one housing unit with its own kitchen and bathroom. The most common examples are duplexes and high-rise apartment buildings with hundreds of units.

There are several reasons you must consider investing in multi-unit homes compared to single-unit rental properties.

You can contact our loan officers for more information if you are looking for a multi-unit investment loan.

Why should you invest in multi-family units?

Like any other investment, you must know the benefits of buying a multi-unit income property. Here are the top reasons investors love them:

1. Cash Flow

Investors love multifamily real estate because of the potential cash flow from rentals. Single-family units only have one tenant, while multifamily has multiple tenants paying, which means higher rental income.

Even when there’s a vacancy in one of the units, you still have income from the rest. 

The key is choosing a location with a solid rental market where vacancies can be filled immediately. 

2. Easier to get financing

It is also easier to get financing for multiunit properties compared to single-family rentals. The risk is lower for lenders since the cash flow for a multi-unit apartment building is more predictable than for a single-unit rental. 

If a single-unit rental loses a tenant, you lose your income 100%, while a four-unit apartment loses only 25% of its income if a vacancy occurs. 

3. Faster to grow your portfolio

Going the single-family unit route would mean buying four single-family units, taking out four mortgages, and dealing with four different sellers. You can avoid the above scenario by purchasing a multifamily with 4 units. 

Multifamily units offer a faster way to grow your portfolio than single-family units. You are also closer to commercial investments with five or more units.

4. Passive Income

Investing in a robust rental market like Salt Lake City or Herriman is a great way to earn passive income.

For a hands-free experience, you can hire a property manager to handle the day-to-day operations so you can focus on your job or next investment project.

5. You can hire a property manager to handle your investment.

Hiring a property management company is a good option if you don’t want to manage properties or don’t have the time and expertise. 

Property managers take care of the day-to-day, like looking for and interviewing tenants, collecting payments, handling evictions, and maintaining the property. They charge a percentage of the monthly income for their services.

With a multifamily property, it is easier to justify the cost of hiring compared to having a manager take charge of a single-family unit.

The more units you own, the more help you need in managing them. The fees you pay for your property manager are worth it.

6. Tax benefits

There are attractive tax benefits for investors of multi-unit properties. You can deduct operation and maintenance costs, property management fees, insurance premiums, and all other marketing costs. 

As the years pass, you can also benefit from real estate depreciation and cost segregation tax benefits for your multifamily.

Are you ready to buy your multi-unit property in Herriman?

As a real estate investor, you’d want to invest in a growing market with great potential. Salt Lake City’s unemployment rate last May of 2021 has fallen to less than 2%, which is the same as pre-pandemic levels. This means the economy is on the rebound in Utah, which is a good sign, especially for suburbs like Herriman.

As more and more people move to Utah, the need for multifamily units is continuously rising. You can always start with smaller buildings and then build your portfolio.

Don’t miss out on this opportunity. Work with Boom Mortgage of Utah for the best financing solutions for your multifamily project.

Our loan experts will be glad to assist you from pre-approval to closing.

Call or message us for a free consultation today.

 

* Specific loan program availability and requirements may vary. Please get in touch with your mortgage advisor for more information.