Why to invest in Multifamily Properties while considering investment in commercial real estate


Have you noticed that majority of millionaires and billionaires invest their wealth into real estate properties?

Well if you have, you must be wondering why the wealthy are interested so much in investing in the commercial real estate.

The answer is simple. Although there is cut-throat competition in the industry, people are still interested to invest their money into the industry of commercial real estate because of the high returns that come along!

Ever heard the phrase ‘High Risk High Rewards’? Well, there can be no better example than the industry of commercial real estate to prove this quote!

There have been times where the real estate investors have incurred huge losses and there have been cases of investors who have only made losses in the commercial real estate business.

But, who is to be blamed? Of course, not the industry itself! It’s the wrong decisions and wrong judgments about the properties made by the investors that lead to losses in real estate business.

So, the real estate truly is a game of high risks and high rewards! And if you in the business at the right time making all the right choices, you can surely reap the benefits of being in the real estate industry.

The choices may include things like choosing a commercial real estate loan lender, hiring the right attorney, choosing the right property to make the right decisions about how much finance to allocate for making additions to the property or if or not to refinance a commercial real estate loan and so on.

Private capital investors have helped thousands of real estate investors by providing the timely suggestions on various grounds of real estate commanding expert decision-making skills!

With right advice and decisions, real estate industry does help people create a fortune. And yes, money does grow on trees!

All you need to know is how and where to plant your tree or in this case, where and how to invest your money!

So, if you’re planning to invest in the commercial real estate sector, you’ve made your first right decision already! Well, who doesn’t love the freedom of time and money given by the real estate investments?

We all love it, right? But what many people do not realize is that throbbing into the world of real estate without having the adequate knowledge or experience can be a big mistake!

The void in real estate education makes investors to blindly put their money into real estate investment strategies that do not work!

While there are many types of real estate investments that have numerous benefits, there are also some real estate investment strategies that do not work in the present market scenario.

Knowing the market scenario entirely is something that demands years of experience and expertise!

We, at Private Capital Investors, have known the real estate industry since it laid it’s baby steps and that gives us an edge.

We often suggest our amateur real estate investors who have just begun their journey in the real estate industry to invest in the multi-family properties.

Now is the best time to invest in multi-family properties. Here are some of the many reasons why you should invest in multi-family properties. Read on!


Reasons why you should invest in multi-family properties


1) You can create various extra cash inflows in case of multi-family properties

Unlike the single-family housing properties, the multi-family properties can be made as a regular source of income along with the extra cash inflow by making small additions to the property.

Let’s say you have a multi-family property with an extra store room which is vacant almost all the time. You can turn this empty non-cash generating room into a cash-generating room by turning it into a laundry room.

A laundry room is easy to set up and all you’ve got to do is search for a contractor who can convert an empty storeroom into a lit laundry home.

With an increasing number of a millennial generation moving into the apartments especially the studio apartments, the idea of the laundry room is extremely profitable!

There will be many tenants who do not have washers or driers hired and your new laundry room can be of great help to them.

Installing simple coin-operated machines can act as a major add-on to your property and might help you have an edge over other multi-family properties in the surrounding area.

Great chances are that you’ll soon recover the investment made on laundry room and also generate extra income through your tenants. Laundry room was just one example!

You can come up with many such creative ways of using up unused spaces and making them leverage your cash inflows.

It could be converting the vacation areas into small cafe or a room for entertainment with board games having a meaningful revenue model. There are numerous ways of adding more value to your multi-family property and earning regular income.


2) Multi-family properties scale up in their valuation over time

Multi-family properties are one of the most fastest growing sectors in terms of rise in the valuation of the property. They scale up to high numbers in a very less period of time.

If you’re good at maintaining the property with due care and diligence, setting up space which is already attractive to many tenants, having good facilities like parking space and making your property more desirable and livable to your tenants, chances are there are already many investors to whom your property is highly appealing!

If you ever plan to sell your property and make a fortune out of it (which in most cases is considered as a great retirement plan), you already know that there’s a high demand for your property and many investors are hungry to buy your property.

Thus, investing in multi-family property today means great returns tomorrow!


3) There are numerous tax breaks when you invest in multi-family properties

Investment in housing is a good thing. Surprisingly, government thinks the same too! Investing in multi-family property means you are providing housing to many people with good maintenance and safe place to reside.

The result of this is that you can gain various tax benefits for your property. There is a huge list of tax deductions that you can claim on the income earned by you as part of the rental income.

As a taxpayer, you can claim a whole lot of benefits and deductions especially in the way of claiming depreciation. Depreciation on the assets of your property happens over a decade or two, or maybe even three in some cases, and this can be written off from your gross rental income, thus reducing the huge chunk of your rental income.

Hiring a competent Certified Public Accountant or a Chief Financial Officer is very important to ensure that you get the maximum tax benefits possible.


4) Multi-family properties are easy to manage

Which of the two following deals sounds desirable to you?

  • Deal A – Having 20 single-family housing properties spread across various cities in 20 different locations
  • Deal B – Having 20 residential units under one roof or one building as part of multi-family property

Most people choose deal B. And there’s a good reason for it. Managing more than two or three single-family housing units spread across different locations requires too much effort both in terms of time invested and the number of property managers allocated.

On the other hand, having the same number of units under one roof is a great deal as it not only saves your time but also saves your costs associated with appointing multiple managers.

Hiring a single efficient asset management company to manage your multi-family property is enough to get started with your multi-family investment and to reap the income that comes along. Easy management is a great stress off your mind as an owner or an investor.

The savvy commercial real estate investors often invest in more than one multi-family properties and that’s how they plant their money tree!

They were the 4 biggest reasons why investing in multi-family properties is a great idea! With many private lending institutions providing private commercial real estate loans and the rising multi-family investment industry, now is the best time to invest.

Co-living has always been a trend and multi-family properties are most attractive to the people who love to co-live and the generation of millennial.

On the other hand, investing in multi-family properties is providing a way of better living and thus you can help change a lot of lives!

Renting a single housing property is often an expensive deal for many people which makes them lose out on the perks of living in independent houses.

On the other hand, multi-family properties are most desirable as these are equipped with all the facilities that one needs to live comfortably while also being easy on the pocket.

Isn’t it a great feeling to know that you are making the lives of many people better? The feel-good factor involved is also one of the biggest reasons that drive investors to invest their wealth into multi-family properties.

Want to learn more? Get in touch with us today.

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