Have you considered multi-family investment properties as the next step in your property investment portfolio? Well you certainly should be, as they are the key to an accelerated income from investment properties, and are also once of the most reliable and stable property investment opportunities in the market.
What Are Multi-Family Investment Properties?
A multi family property is a building which has multiple dwellings, so multiple families live within that building, for example an apartment block, condominiums, or a large home that is converted into apartments. If you were to consider multi family property investment that are three main routes into it.
The first option is to invest with other investors in an apartment building. This route has a more stable and long term return however you are going to see a much lower return than if you were in the investment on your own. The second route is to buy a property that already has multi family dwellings, and has sitting tenants. This option provides you with returns day one and won’t involve too much work. As each home becomes vacant you can invest in redecorating it or refurbishing it to up the rental value of that dwelling. The final route is to purchase a large building that is currently a single family home, and then convert it into a multi family property. Of course this will take a time, investment of further capital, and also a lot of hard work with local authorities to get planning permission.
Can you get planning permission to convert a large home to a multi family property? Well take a look at the neighborhood. If there are several other properties on the same rad or block that have been converted then there is a good chance you can get permission to do so. However, if that’s not the case you can talk to your local authority and get an indication off them if it is possible but you can’t bet on that so be prepared to have to renovate the house as a single dwelling.
Advantages of Multi-Family Properties
The major advantage to renting out multi-family properties is that your risk is spread. Renting out a house, your income is dependent on the house being let, and any months where its empty you could be making a loss. Whereas with multi-family dwellings you shouldn’t be in a position where you’re making a loss if one of the apartments is empty, so you can afford for that to happen, and take time out to refurbish it before letting it again.
Another major advantage is that should you need a cash injection for another project you don’t need to sell the whole property but could just sell one of the apartments, which will generate some immediate cash without jeopardizing your long term return from the property.
If you convert a large home into apartments the overall sale value will increase considerably when selling the apartments separately.