Benefits Of Multi-Family Properties

While there are multiple benefits to owning real estate and leveraging properties for financial gain, tax write-offs, and more, in this blog I am going to focus on the benefits of owning a multi-family property over a single-family unit.

OWNER-OCCUPIED BENEFITS

Offset Mortgage: By having a tenant(s) you can use the rent(s) to help pay your mortgage.

Higher Pre-Approval: Owner-occupants get approved for a higher loan amount since the rent is considered additional income. This allows owner-occupants to purchase a higher-valued property.

Residence/Investment: Purchasing an owner-occupied multi-family is the equivalent of buying both a primary residence and an investment property/properties.  Owner-occupants can buy up to a 4-family home, one unit to live in and up to three to rent out.

Combined Expenses: In theory, purchasing a multi-family is like purchasing 2-4 properties, however, you only pay for closing costs once.  Additionally, as an owner, you typically save on maintenance by having everything on one lot.

INVESTOR BENEFITS

Mitigating Risk: By having multiple tenants per property you are mitigating your risk.  Ideally, all units would be filled with tenants who are paying on time.  However, if a unit is vacant you have another income(s) to help cover expenses.

Lower Rent/Higher Profit: Although the rent for a multi-family is typically less than that of a single family of equal size and condition because you are getting multiple incomes for a single property but only paying property taxes/ maintenance on one property, you usually make a higher profit.

Single Closing: Earn multiple rents while only paying closing costs once.