One of the best ways to build wealth is to invest in real estate, and one of the fastest ways to make more money faster is to invest in multi-family homes. If you’re a first-time investor or have only previously owned single-family homes, then you may be wondering why multi-family homes can be such a financial boon. Let’s take a closer look at how you can increase your income and build your net worth more quickly by investing in multi-family properties.
What are multi-family homes?
First of all, let’s define what constitutes a multi-family home. Simply put, a multi-family home is a building that houses multiple separate residences. Each residence has its own kitchen, bathroom, utility meters, and entrance. Examples of multi-family homes include duplexes, townhomes, condos, and small apartment buildings. In real estate, multi-family homes have between two and four units. Any building with more than four units is considered a commercial property. If you are interested in buildings with more than four units, please contact KW Commercial New York.
Make money by living in one of the units
When you buy a multi-family home you can choose to live in one of the units. This has several advantages that can positively contribute to your bottom line. First of all, by living in the home you may qualify for owner-occupied financing. If you’re simply an investor, then you’ll have to pay at least 20 percent down for a property. But if you’re planning to live in one of the units, then you may be able to pay as little as three percent down — or even zero down if you qualify for a VA loan. You may also qualify for a lower interest rate as an owner. In addition, you can substantially decrease or even eliminate your own house payment with what you collect in rent from the other units.
Make money with greater cash flow
The money that you make from your tenants may not only cover the cost of your mortgage. Over time, it could also provide you with greater cash flow. As rental prices in your area increase, so does the amount of money you make each month. You also assume less vacancy risk with a multi-family home as compared to a single-family residence. It is highly unlikely that every unit will be vacant at the same time, and the rental income from your occupied units will, in most cases, be sufficient to cover your expenses until you find a new tenant.
Make money by quickly growing your portfolio
While a single-family residence only creates one stream of cash flow, a multi-family home creates several. If you want to quickly increase your portfolio, it is more efficient to do that with a four-unit building than with four separate single-family homes. Investing in a multi-family property saves you from having to negotiate with separate sellers and obtain separate financing for each home. It is one of the best ways to increase your portfolio with fewer headaches and less paperwork.
Make money with tax benefits
Finally, purchasing a multi-family home can offer excellent tax benefits, especially if you are an owner/investor. To find out more about what kinds of tax benefits would be available for your situation, consult a tax professional.
Make money by working with a team of experts
Right now is an excellent time to buy in New York and having a team of experts on your side can help you navigate the process and secure a favorable deal. If you’re in the market for multi-family real estate, then contact the Keller New York Bronx office at 718-697-6800 or the Eastchester – Scarsdale office at 914-713-3270 today. We’d love to help you achieve your real estate goals!