Understanding Multifamily Real Estate Investing – Most people who are coming at the end of their professional career or have money to invest for later returns, can look to real estate as a safe investment best. Unfortunately, real estate investing is typically restricted to sole ownership real estate. Few people are aware of the opportunities that lie in multifamily real estate investing.
Before talking about multifamily real estate investing, here is a look at what multifamily real estate is all about.
What is Multi Family Real Estate?
A multifamily residential unit is a housing where there are multiple owners owning separate unit in a single unit. The larger unit can either be a single building, with a number of flats, or even multiple buildings with a number of different flats. A common form of a multifamily real estate is an apartment building where different apartments have different owners.
What are the Different Kinds of Multifamily Real Estate to invest in?
There are a number of different types of multifamily real estate that you can invest in. Some of the common ones are outlined below.
- An Apartment Building (A building which will have multiple apartments. Multiple apartments can be spread out on a floor by floor basis or there may be a number of different apartments on each floor.)
- Duplex (A building that is made up of two separate houses which are next to one another and will not have a common area)
- Townhouse (A house which is attached to other houses and each house will have their own separate entrance)
- Two/Three/Four Flat (A house where each floor is owned by different families and they are owners of their own floors. They will typically have a common entrance)
What is Multifamily Real Estate investing all about?
Multifamily real estate investing is all about diversification of an investment portfolio. Basically most home owners are willing to invest their saved up equity in real estate. In real estate, there are two reasons for people to invest, they either invest a sum of money and wait for it to increase in equity before selling it off or to rent it out and live off the rent earnings.
In both cases, a multifamily real estate investment is a better bet. This is largely down to the fact that when you buy a multifamily estate, you are actually investing in more homes. They will earn you more rent, as well as offer a better resale opportunity, since the increase inequity of 3 or 4 apartments is likely to be more than that of a single home.