People usually say that investing in a multi-family asset is expensive and there is a myth surrounding real estate investment when it comes to multiple housing. First, you need to be able to understand the difference between a multi-family asset and a single-family asset.
A single-family is an asset that comprises of one or two tenants while the multifamily asset has to do with a large volume or number of tenants and give you the opportunity to get your money back on time.
The multifamily asset is great because it;
1. PRODUCES ENOUGH INCOME TO PROTECT YOUR INVESTMENT
It is easier for you to be protected when you invest in a multifamily asset than in a single-family apartment. when you invest in a single-family apartment, the likelihood is this; if you have 50 million naira and build a seven-bedroom duplex, it is likely that you aren’t going to get back your capital until about 20–25years due to the fact that you might have a tenant who won’t be able to pay or who is going through financial stress and then the tenant may have to move out of the apartment, or you may need to maintain the apartment, you can’t start moving tenants from apartment A to apartment B.
But when it comes to a multifamily apartment, you can be maintaining one part of the building while earning rent on another part of the building. It also gives you protection because of the volume and high demand it brings.
2. APPRECIATES BY 50% EVERY 10 YEARS.
In a great location, a single-family apartment appreciates by 4% every ten years while a multi-family apartment in that same location will appreciate by 10% every 10 years.
3. IT IS EASIER TO GET FINANCE FROM ANY FINANCIAL INSTITUTION.
You are likely to get the bank to fund your real estate investment when buying a multifamily asset than when building your own apartment. Even the government has the tendency to work with you because of the volume you can provide for the masses. You will also have more people financing your real estate projects when it has to do with multi-family housing than when it has to do with single-family assets.
READ: THE LEGACY OF PARENTHOOD
4. TENANTS PAY BEFORE THE PROPERTY IS COMPLETED
When it comes to multifamily assets, people or tenants will pay you ahead of time for the property. This means that with your down payment, you can start making money for your property. You don’t need to put yourself under immense pressure, what you need to pressurize yourself about is how to raise the first down payment when it comes to multifamily assets. But when it comes to a single-family asset, you can put all the money there because it is not going to be making a lot of money for you.
6. THE FASTEST WAY TO BUILD WEALTH
You can’t build wealth on the platform of owing a single-family apartment but you can continuously build wealth on a multi-family investment.
7. OPPORTUNITY TO REPEAT YOUR INVESTMENT
A lot of the time people who buy single-family apartment get discouraged because they are not making money from it due to the low volume and then they are less motivated and inspired to do more of the investment.
But you are encouraged to do more in multifamily investment because of the sweet deal and you will want to keep up the momentum.
In conclusion, you need to think in terms of using leverage especially when starting. By using leverage, you make your money work for you. When you buy a single-family investment, it is like keeping money under your pillow and expecting the money to multiply. It is not going to work. What you need to do is to put the money in an asset for it to grow.
To know more about Middlechase Property Limited, click on the link below: Middlechase Property Limited or call 08186577504.
https://medium.com/@middlechaseblog/why-you-need-to-invest-in-multi-family-asset-c5c96131d616