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It is easier to finance
While multi-family real estate investing may be more costly, it is also much easier to finance than single-family properties.
Depending on the type of property, a multi-family property can run into the millions for multi-unit complexes, especially for a good location. You also have to account for zone rules and vacancy rates, as well as costs for repairs and utilities.
Financing is, of course, another key consideration. If the multi-family property has five or more units, you have to get a commercial property loan.
The plus side, however, is that multi-family properties consistently generate solid cash flow. This is true even if some tenants are late on rent or there are a few vacancies. Look at it this way: if your 10-unit property has one vacancy, that means it is only 10% unoccupied. If, however, a tenant moves out of a single-family property, it is 100% unoccupied until rented again.
This all means that multi-family real estate is less risky for lenders. And for the property owner, it can result in more competitive interest rates.
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This article was originally published by a www.mpamag.com . Read the Original article here. .