Year end thought: Multifamily Investments

[Priyanshu Adathakkar]

Investing in apartment complexes should be considered a longer-term and possibly deeper commitment than owning and renting out single-family homes. It takes longer to sell a building or large complex than a home and it may take some time to get the hang of managing such a large property. However, if it’s done right, owning a multifamily complex can provide a constant source of income for years to come with considerable upside along the way. Any investment is a balance of risk, work, and reward, but if you’re ready to take on a bigger challenge and move to the next level of investing, then a multifamily project might be the right bet.

Investment Tips

1. Have a property management firm screen your tenants
2. Require that your tenants have renter's insurance
3. Make sure your property is protected for vandalism due to the tenant not taking care of the rental
4. Make sure you have insurance that covers you for fair rental loss
5. Make sure you have adequate limits of liability

[Gino Barbaro]

@Priyanshu Adathakkar

Hi Priyanshu,

I disagree with your premise that apartments should be considered more long term than SFH. If you want to be a successful investor and build a business, accumulating SFH to a portfolio is a long term endeavor. The idea is to buy right, hold long term, have tenants pay down mortgage, refi and or sell.

I chose Multi over SFH due to economies of scale and the fact that I had a full time job, so managing 25 homes would clearly be more challenging than my first 25 unit complex.

It depends upon the investor's goals and exit strategies. People are more comfortable with SFH because most people can relate to buying one. They create a barrier of entry and limiting belief that multifamily is so difficult to enter.

If a pizza guy and a drug rep can do it, anyone can. You just need a plan and enough reasons to do it.

Happy New Year

Gino