Investing

How To Get Started in Multi-Family Property Investment

Investing in multi-family properties offers a unique balance of risk and reward. For those who have experience owning and managing single-family homes, the opportunity to level up and increase revenue is a natural progression. For others starting out with investment properties, the low risk achieved from having multiple tenants is especially attractive. However, every investment has risks. In order to be successful with multi-dwelling structures, certain criteria should be meticulously analyzed. Do your own research and personalize each investment to your needs and resources.

Find the Right Location

With any real estate transaction, location is key. Every market is different, with unique growth trends, median family income statistics and supply vs demand ratios. You must become an expert for the location, just as Steven Taylor Los Angeles did in California when he was getting his start in real estate. Being able to read and anticipate the trends of a location will be your best chance to invest in an area at the perfect time.

It’s not always a good decision to go after cities with the largest growth. Instead, try to match the level of growth with the class of buildings. If you buy a run-down building in an area with lots of new construction, you may have trouble finding tenants. The same is true for purchasing a brand new building in a city with old-world charm. Invest in properties that speak to the type of home residents want and can afford.

Find the Right Property

Once you decide on an area for your investment, it’s time to look for properties. This is where research comes in. Successful investors, like Steven Taylor LA, rely on accurate real estate analysis. You can not simply ask the seller for information. Online tools, like Mashvisor, provide metrics for property investment. Or, you can dig up the information yourself. In order to calculate what a property is truly worth, collect property tax bills, maintenance and repair records, tax returns and comparables. You must also account for vacancies in rental units. It is rare that every unit will be filled all the time, so take that into account when laying out financials.

Find the Right Property Manager

If you’re just starting then you may want to save money by taking this job on yourself. Property managers handle the day-to-day operations of the building. They keep residents happy. Managers are also responsible for advertising vacancies and filling those units as they come up. If you are considering managing your own investment, make sure you have the time and availability to handle emergencies. It is helpful if you live close to the property.

 

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