Single-Family Vs Multifamily Homes – Which Is Better From An Investing Perspective?

Real estate investments are a great asset to have on your portfolio. It helps reduce the overall risk of your portfolio since its value generally appreciates.

Within residential real estate, you have the option of single-family and multifamily homes. Single-family homes provide only one unit to rent, while a multifamily property refers to complexes with multiple rental units available. Often investors are confused about which would be a lucrative investment for the long run.

Here are some factors that make multifamily homes the better option:

Obtaining financing for multifamily homes is easier

The initial outlay of investing in a multifamily property is much higher than a single-family unit, however, it tends to be easier to finance. Multifamily properties can easily cost millions, and while it may seem like you won’t find a lender willing to provide the funds, private lenders are always up for multifamily financing.

Lenders are enthusiastic about this type of investment due to the potential it has. Multifamily real estate ensures a stream of cash flows every month, even if all the units aren’t occupied. You’re more likely to get approved on the loan for a multifamily property over a bank loan for an average home.

Multifamily property grows your portfolio quicker

Multi-family properties are ideal for investors looking to build their portfolio quickly. Going the traditional route by investing in single-family units can take years before you reach the level of investment and returns you’re happy with. This also means taking out multiple loans to fund these investment. Multifamily real estate ensures you acquire assets in the most efficient way possible.

The risk is diversified with a multifamily property

Though real estate is considered a relatively safe investment to have on your portfolio, you always run the risk of tenant’s defaulting on payments. With a multifamily property, your risk is diversified. If there are 20 units on the property, if one or two default on rental payments, you still manage to earn a handsome return.

Tax benefits

Since multifamily properties provide housing to many people, the government will reward you for providing housing. Tax incentives are one way the government encourages investments in multifamily property. The tax breaks you’re allotted depends on the classification of the property.

Global Capital Partners Fund LLC is a private money lender based in NYC that provides financing solutions to help acquire multifamily properties. The company provides financing for apartment buildings, office buildings, retail property, nursing homes, assisted-living facilities, and townhouse developments. Their loans range from $1,00,000 to over $100,00,000. Their other financing solutions include construction and development financing as well as bridge loans.

Contact a senior partner at GCP today at +1-800-514-7350 to learn more about our multifamily acquisition funding programs.

Categories: Real Estate

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