If you’re considering a rental income property for purchase, but you’re not sure whether to go for the traditional, single-family investment (i.e., homes, duplexes, condos) or to opt for the larger, multi-family complex, you’ve come to the right place. Here are the top five reasons why the larger investment may be worth more to you in the long-run:
- Multi-family properties allow for more tenants, hence the name: multi-family. This, naturally yields itself to greater income potential. While there is also greater potential for issues, proper property maintenance and management can reduce this risk.
- Apartment complexes are where young tenants are moving. The younger generations desire apartment living. They want to rent, not own; they want to be managed, not manage; and they want ease of access and use. In fact, Generation Y has become affectionately known as Generation Rent in many parts of the world.
- Baby Boomers, now the second largest generation, are also moving into smaller living communities, downgrading their living desires in response to having an empty house. A wonderful turn of preference for multi-family owners is the fact that a considerable amount of Boomers are shunning retirement communities in favor of properties that offer convenience and community, according to a recent report in the Business Insider.
- While a single-family home can definitely be managed by a third-party, a multi-family property lends itself more easily to on-site management of trained professionals.
- On a per-unit basis, the multi-family investment is typically less expensive than a single-family investment. You are purchasing more units, that will almost always individually equal less than the total of an investment on just one single-family property. The investment, therefore, lends itself to greater cash flow potential.