3 Reasons Why You Should Invest in Multi Family Real Estate

Becoming truly wealthy will require you to do more than just save money. Rather, you are going to have to look into things like investing your money somewhere, making your money work for you essentially. A lot of people turn towards the stock market, thinking that this will lead them to infinite riches. However, the fact of the matter is that playing the stock market could potentially end up costing you a great deal. It would be a much better idea for you to look into real estate.

This is because of the fact that real estate gives you the potential to grow your initial investment by leaps and bounds without making you suffer through the same pitfalls that the stock market could potentially end up putting you through. It also gives you a more hands on role in growing your capital, something that will definitely appeal to those investors that want a little more control over how capital growth is achieved. You essentially have a lot more options when it comes to real estate because of the fact that there are so many different approaches that you could go for, each of which will give you unique advantages over the other

One of the safest and most profitable techniques that you can use while investing in real estate is to invest in rental property. There are a lot of benefits associated with this kind of methodology. Rental property can give you a stable income that you would receive every month. An added benefit is that the value of your portfolio will increase on its own as time goes by. Real estate gives you so much control over your initial investment that there are a further two subcategories within rental property that you could look into.

These two subcategories have to do with the type of tenants that you are going to be involved with. You can either invest in a single family unit, or you could opt for a multi-family property. Multi-family properties are basically places such as apartment buildings or other areas where a number of families will live instead of just a single tenant. You can also refer to such properties as multi-tenant properties. While you should definitely bear in mind the fact that multi-family properties will be a more expensive investment, they can pay much higher returns as well. Listed below are three of the most prominent benefits that you will receive if you look into multi family real estate.

#1 Easier Financing

A lot of people might advise you against investing in multi family properties because of the fact that these properties are going to involve a lot more infrastructure and are thus going to be significantly more expensive than single family homes. After all, single units can be purchased within tens of thousands of dollars. Multi family properties on the other hand will cost hundreds of thousands if not millions of dollars to successfully complete. Bearing all of this in mind, you might make the assumption that getting financing for a single family home is going to be much easier than going for a million dollar loan that would allow you to build an apartment complex. After all, getting small loans is easier than getting big ones right?

However, banks are not going to think of it in those terms. Indeed, a multi family property is actually more likely to get financed. This is because of the fact that the probability of getting a consistent cash flow is more likely with a multi family property. Since your property will have so many tenants, the odd late rent payment as well as a few vacant properties are going to be less of an issue. You will still probably get enough to allow yourself to repay the loan on time. On the other hand, if you are building a single family home, your entire income from that property will depend on a single source. If the rent payment is late or if the property is left vacant for a time, it will not be giving you the revenue necessary to help you pay the loan back on time. Hence, you are going to be considered more likely to pay back the loan if the property you are building will have multiple tenants.

Basically, a multi family property makes you a somewhat risk free investment, at least as far as paying back your loan concerned. In light of this, not only is financing going to be more likely but chances are that banks would be willing to give you a more relaxed interest rate. This is because of the fact that they would want you to become their customer since you are going to be investing in a high value property that the bank is going to own until the loan that was used to buy or build it has been fully paid off.

#2 Makes Portfolio Building Easier

One of the most important things that you need to think about when you are trying to use intelligent investments to become as wealthy as possible is your portfolio. You need a portfolio that is both diverse and considerably large if you want to remain viable in an increasingly competitive modern market. Building a portfolio with single family rental properties is going to end up taking a very long period of time which just won’t do because of the fact that you are going to have to build a portfolio fast if you want to grow in a manner that is in pace with modern business.

Single family rental properties take a lot of time to acquire. This is because of the fact that they are all going to come from different sellers which means that each property is going to require you to haggle for it individually. You are also going to have to inspect each property individually. This can make building an adequate portfolio a process that is both arduous as well as time consuming, especially when you consider the fact that finding single family properties within close proximity to one another is going to be next to impossible so there is definitely going to be a lot of travelling involved when you are trying to buy these properties. Another big problem that is associated with building your portfolio using single family properties is the fact that sometimes you will have to apply separately for a loan for each property. Since the aforementioned point has already told you that loans for single family real estate are less likely, you can see why this can create yet another problem that you are going to have to contend with.

On the other hand, multi family properties are not going to give you any of this grief. They are by their very nature in very close geographical proximity to one another. All of the units are going to be part of the same property, which means that there will be a single price. And, of course, this single price will mean that you will only have to take a single loan for the property to boot. To top it all off, the inspection process will be a lot simpler as well since the units will have been built similarly to one another so there won’t be a new blueprint to look through each time.

#3 Property Management Becomes More Financially Realistic

Simply buying a property and renting it off to someone is not going to be all that you have to handle. The properties you own need to be managed as well. Most landlords tend to hire someone to do that for them, there are quite a few property management companies out there that you can look into for this purpose. They will handle the management of the property for a portion of the rent that you are receiving. People that are managing your property for you are going to help make sure that you get your rent money on time, will look for tenants for you and will work on maintaining the property in question.

However, if you own a single family property, chances are that you are not going to be able to hire someone like this because of the fact that you are just not receiving enough revenue to make this possible. If you own a multi family property, you will have a lot more incentive to look into the various management alternatives that are available on the market.

In Conclusion

The strategy of opting for multi family homes is definitely going to help you make the most of your portfolio and start generating a significant amount of revenue quickly. It is highly recommended that you look into multi tenant properties so that you can see the benefits for yourself. From financing to rent collection to hiring a property manager, pretty much everything about multi family properties make them a much smarter investment for the people that are looking to build them.

9 Tips to Help You Invest in Multi-Family Properties

Investing in a multi-family property can be a smart move if you want to build a portfolio quickly. There are numerous benefits associated with multi-family properties, but what you really need to learn is how you can go about making an investment of your own. Provided below are a number of tips from pros that have already built excellent portfolios by investing in multi-family real estate. You can apply these tips to become successful in your own right and make the whole investment process a great deal easier than it would have been otherwise.

#1 Focus on Location

If you want to be able to invest successfully, you need to learn how to scout a location. This is for purely practical reasons. If your multi-family property is in a good location not only is that value of the property going to go up but complexes in good locales end up getting rented out a lot more quickly than properties that are in adequate but somewhat less stellar locations. Make sure that the area of your multi-family property is family friendly, and that it is as close to the necessary amenities as possible. This means places like schools and hospitals, as well as stores. Try to find a complex that is far from the city center though because such places tend to be somewhat less family friendly.

#2 Plan For Unexpected Expenses

Buying a multi-family property involves a lot of unforeseen expenses. The key to making sure that you never fall financially short of being able to pay for said expenses is to overestimate your budget. You can start off by calculating all of the costs and then adding a solid percent of that amount on top of that. This will definitely make it a little more difficult for you to be able to afford the investment in the first place, but doing things right the first time will allow you to prevent mistakes from messing things up in the future.

#3 Have a Set Goal in Mind

A multi family property can be useful for a wide variety of reasons. You need to figure out what your actual goal is. Do you want a property that would appreciate over time in its overall value? Or do you want a consistent rate of return that would provide you with some level of income that you would be able to live off of? Both goals will require both different levels of planning and different kinds of execution as well, so try to keep this in mind.

#4 Work With People Who Have Done This Before

If you want to invest in a multi family property, you are going to have to look into building a team of professionals to help you do so. A common mistake that people make is that they end up hiring pretty much anyone who works in the field of real estate. What they should really be doing is hiring someone who has specifically worked with multi family properties before.

#5 Start Small

Another common mistake that a lot of people make when it comes to family planning is that they end up trying to bite of way more than they can chew. Not all multi family units are apartment complexes. If you are new to this field you can start off with a duplex, or maybe even a triplex if you want a bit of a challenge. This will help you get your portfolio started and moving in the right direction without putting too much pressure on you to succeed. Too much pressure can make it difficult for you to excel in a field.

#6 Try to Be Logical And Objective

A lot of the time, people that are thinking of investing in real estate are going to be tempted to make a decision out of an emotional train of thought. They might end up buying a property because of a feeling it gives them. It is natural to be excited about your first purchase, but you are putting real money on the line so it is very important that you look into the pros and cons of the purchase that you are about to make so that you don’t end up regretting your decision later on.

#7 Focus on Renovation

Once you have purchased a property, renting it out to people should be your biggest priority. Renovating the place a little will make it more likely that people are going to want to live in your multi family property. This is because of the fact that it will give the place an air of being cared for, and it will give the impression of newness. People are more likely to rent a property if they think it’s new.

#8 Make Sure Maintenance Has Been Done Before Purchase

This is one of the rational thoughts that should go through your head before you buy a property. Even if the property looks spick and span, you need to ensure that all of the necessary recent maintenance has been done. Failing to do so could result in unexpected future costs, so if maintenance has not been done then this could give you the chance to lower the asking price at least to some extent. That being said, it will always be a better idea for you to get a property that has already been maintained.

#9 Opt For a Direct Lender

Borrowing from a direct lender can end up saving you a lot of money. This is because of the fact that you are not going to have to pay the various fees and commissions that would have otherwise been the case if you had opted to get a loan through a middleman. Although the process can end up being tedious and drawn out without a middleman, the money that you are going to save will definitely end up making it worth it because you can just invest this money back into your property.

9 Real Estate Marketing Tips For Social Media

Social media is one of the best places to market real estate. However, when marketing on social media one should recognize that it is a unique beast. It needs to be approached in a different way in order to do it justice. If you want to start advertising real estate on social media you should check out the tips provided below. These tips can help you approach social media marketing of real estate in the right manner.

#1 Facilitate Sharing As Much As Possible

A lot of the people that are going to be coming to you will be doing so by checking out posts that other people have shared. Hence, you need to make it as easy as possible for people to share your posts, listings and other marketing tools on their own social media pages. Word of mouth is a very powerful form of advertising, and it can prove to be a game changer for you if you learn how to harness it in the right way.

#2 Get Reviews And Share Them

If you do your job well enough, you are going to start getting a bit of a reputation with the people around you. You need to use this reputation to your advantage. If you have a social media presence in the form of a social media page, give people the option to review you. Make sure that you display these reviews as clearly as possible. Reviews can change a lot for you if you get enough good ones. This is because of the fact that people tend to look for service providers that have good reviews. Indeed, this sometimes becomes the only thing that people use to decide who they end up acquiring their services from.

#3 Participate in Social Media Groups

Having a Facebook page is great, but it’s really only the start of your social media marketing tactics. You should also make sure that you are in as many relevant Facebook groups as possible. There is almost certainly a group that pertains to real estate in the area you specialize in. You can join this group and try to find customers there. It is a somewhat unconventional way to find customers but the fact of the matter is that it works, and real estate often requires you to be a little informal at times.

#4 Be Responsive at All Times

You need to be able to respond to customers in the most efficient way possible. No matter what time of the day they contact you, they should be getting at least some kind of a response from your end. That being said, you are a human being and will probably need to sleep at some point, so you can opt for a help desk software to manage your live chat for you. There are a lot of affordable Zendesk competitors such as Kayako that provide help desk software that can make managing your profile a lot easier than it would have been otherwise.

#5 Use The Facebook Live Option

Posting videos of your real estate is going to be a great way to get people to check it out, but you should try to go live with those videos as much as possible. This is because of the fact that when you go live, the people that are following you are going to end up getting notifications that this is happening which might drive a fair amount of traffic to your video and thus make it a lot easier for you to get the level of audience participation you need.

#6 Create a Photography Budget

One cannot stress enough the importance of visual communication, particularly in our visually intensive modern day and age. The fact of the matter is that sales have been made and deals have been closed on the basis of good pictures alone, so if you are wondering about whether or not you should invest in good photography of the properties that you are handling the answer is a resounding yes. The fact of the matter is that these properties are going to look great if you have the right kind of budget, and this is going to make people a lot more likely to be interested in them.

#7 Do Keyword Research

Part of the process of marketing your properties on social media is figuring out what people are searching for. There are keywords that people put into search engines in order to figure out what properties are available to them nearby. If you add these keywords to the content that you produce you are going to end up getting a lot more traffic to your blog or your page. This is a great way to maximize the traction that your posts are going to be getting.

#8 Hire a Content Writer

You don’t need to get someone on your payroll to get good content. You can opt for a freelancer instead who would do the work for you on time for a fixed sum of money and then move on. If you want to succeed in marketing your properties through the medium of social media, you really need to mind the content that you are putting out there. The content needs to be engaging and relevant to the needs of your potential customers. Hence, hiring a professional is something you need to do in order to do your marketing attempts justice.

#9 Attend Local Events (And Post About It)

There are probably a lot of events near where you live that would boost your profile to an extent if you go. You should definitely attend as many such events as possible because of the fact that it will give you good content that you can post on your social media pages. Just make sure that the events that you are attending are at least in some way relevant to the field that you are currently working in otherwise the content won’t get that much reach.