The real estate industry has been on the receiving end over the last couple of decades. The twists and turns witnessed in this industry have inspired other significant developments in this sector. Based on the latest real estate trends, both commercial investors and property buyers prefer multi-family homes to single-family units. This article looks at why multi-family homes have become popular in recent years.
From an investor’s point of view:
Securing a loan for a multifamily property is easier than getting one for a single family home. As much as a multi-family home can be expensive, lenders prefer financing these housing units since they offer them better rewards or potential for making money. Moreover, since they have the potential to generate better cash flows than single-family homes, they are often considered to be low-risk investments.
High potential for appreciation
Anyone would welcome an investment that offers him or her the best returns. The only thing one should do is to ensure their property is well-maintained and the existing tenants are satisfied. Real estate investors that realize this early can secure steady cash flows, and also create an opportunity for their property to appreciate over time. This translates to increased equity when you cash in on the property.
You could be the one managing it or a hired team. Either way, managing properties in one location is easier than managing multiple single-unit properties in different locations. As such, you are assured of having an easy time doing repairs, overseeing maintenance, or dealing with tenants. Thanks to better cash flow, most investors with multi-family homes opt for the services of a property management company. This leaves you with more time to focus on things that matter like evaluate and growing your portfolio.
From a buyer’s perspective:
Ever-rising rental rates
Buying a home for personal reasons is always inspired by the dissatisfaction of having to pay rent. Unfortunately, the real estate market trends often make most buyers afraid to buy their home. This has the effect of lowering the demand for properties and at the same time increasing residential rental demand. The ever-increasing rental prices have forced most people to consider investing in multi-family homes, which are cheaper than single-family homes.
The desire to own property
Investors are well aware of the fact that most people would welcome the idea of having a house they call their own. To satisfy this demand, they opt to construct multi-family properties and sell them at an affordable price. This explains why most condos are in highly sort after today.
The forces of demand and supply have inspired the popularity of multi-family homes. Presence of real demand for these units has made most investors turn to this direction. Notwithstanding, most lenders are also willing to finance these low-risk investments.