If you’re thinking about investing but not sure where to do it, consider that investing in real estate can bring you average returns of 8-12%. Long-term investors in the stock market typically enjoy a 10% annual return, but real estate investing is much less volatile than the stock market.

Investing in residential property, particularly multi-family real estate, is a smart investment that’s stable and has even less volatility. Keep reading for 5 benefits of multi-family real estate.

5 Benefits of Multi-Family Real Estate Investing

A multi-family home is one that includes two or more units for dwelling. Each one has its own kitchen, bathroom, entrance, living space, and so on.

These can be duplexes all the way to larger apartment buildings. Here are some examples of multi-family real estate for sale.

Investing in one of these properties has some great benefits, not to mention, it gives you the opportunity to take an active role in growing your investment.

1. Multiple Properties Under One Roof Are Easier to Manage

Think about it: if you own four single-family investment homes, you have four individual homes to manage, maintain, and repair. Factor in travel time and you’re talking about a major time commitment.

With a multi-family home, you make one stop. While you still have multiple units to manage, maintenance and repairs become much more feasible when you only have to visit one site.

2. You Can Get Tax Breaks

You can get tax deductions for your investments from both the federal government and your local government in some locations. These tax breaks reward you for creating housing for your community.

The best way to make sure you are maximizing these tax breaks is to hire a knowledgeable CPA who can complete your tax returns for you.

3. There Are Different Ways to Increase Your Cash Flow

Rent is the obvious income stream from a multi-family property. But you could also increase your cash flow by creating a coin-operated laundry room in the building. Creating a clean and safe laundry room where tenants pay to wash their clothes is money in your pocket.

The cash you make from the laundry room will pay for any expenses in setting it up and purchasing the washers and dryers. Another way to increase cash flow is to provide covered parking or parking in a garage for a fee.

4. It’s Easier to Get Financing

Lenders are more willing to provide financing for multi-family homes than single-family ones because the risk is lower. Even if a tenant moves out of a multi-family building, there are still other tenants there, presumably paying their rent.

The bank also views this type of property as holding its value more than a single-family home. This makes them more likely to work with you to finance a multi-family property.

5. They Hold Their Value

If you do the work to maintain your property, it will hold its value over time, and may even increase in value. When it’s time for you to sell, a property that’s well-maintained and has held its value is more attractive to new buyers.

The Bottom Line

If you’re considering an investment in property, you should consider multi-family real estate. There are a number of benefits offered by these types of properties.

If you need more advice or tips on investing in real estate, visit our blog.