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Multi-Family and Apartment Investing

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Eric James
  • Malakoff, TX
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What are economies of scale benefits?

Eric James
  • Malakoff, TX
Posted May 23 2017, 07:05

What are the 'economy of scale' benefits of properties with multiple units? If one self manages I can see time savings due to not having to travel to multiple locations. But on the other hand, as there are fewer multifamily properties the location is likely to be farther away than smaller properties you could buy, so that might be a wash.

I can see the cost of roof replacement being lower, but mainly if this is compared to a single story property. How much would the savings be to replace a single roof over 5,000 square feet compared to 5 roofs over 1,000 square feet?

For items such as HVAC, hot water heaters, appliances etc., if all units have each of these, would the economy of scale factor mean you purchase (for example) 10 of everything at once, whether you need them all or not?

What other economy of scale savings could there be?

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