- March 10, 2017
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As commercial real estate brokers, we get asked all the time where investors should spend their money. The easy answer to this question is always multifamily property. While we are never going to say other sectors aren’t solid investment choices, multifamily has a lot of benefits that are quite easy to think of.
Any commercial real estate asset that you invest in should provide you with steady appreciation, but this value is realized over the long term. With multifamily properties you not only get to experience appreciation, but also an immediate monthly income source to go along with it. Below we outline the top reasons an investor should consider diving into the world of multifamily properties.
[bctt tweet=”Want to invest in #CRE and not sure where to start? Here’s 3 reasons why that answer is #multifamily. ” username=”svngll”]
Financing is Easy
Let us start out by saying yes, the cost to invest in a multifamily property can be higher than that other commercial real estate sectors. This however does not mean that financing is more difficult to attain. Financing is difficult for any investment when there exists a high level of risk, and from a lending institution standpoint multifamily properties are not risky. Why? Because they consistently generate cash flow each month. Say a multifamily property has 5 of its 20 units vacant, sitting at 25% vacancy, it is still pulling in 75% worth of rent funds each month. Compare this to a single tenant property, if a tenant leaves that property it then sits at 100% vacant, pulling in 0% of rent funds.
Portfolio Growth is Fast
Multifamily properties are a great choice for investors who are looking to build a large, stable portfolio…and want to do so quickly. With one multifamily purchase an investor can acquire anywhere from 4 to 120+ units, as opposed to 4 to 120+ single property purchases.
That means with multifamily you deal with one property, one address, one seller, one loan and one transaction. In return the investor acquires numerous cash flow streams, all under one roof. A heck of a lot more efficient, huh?
Multifamily Property Management is Affordable
Let us just start with this truth: If every investor could afford property management, they would. Handling the day-to-day operations of an asset is a lot of work, and most owners simply don’t want to, or don’t have the time to, take on the responsibility. Those who invest in multifamily properties don’t have to worry about personally handling the property management of their assets, as they have the cash flow to afford to hire someone else to do it.
By hiring an external property manager for their multifamily property investors realize many things, including: asset quality improvement, happy tenants which lead to lease renewals, improved asset value, increased returns and decreased operating costs.
Looking to Invest in Multifamily Properties in Baton Rouge?
If you are seeking to invest in multifamily commercial real estate in and around Baton Rouge, you have come to the right place. Deeply entrenched in the local multifamily market, our expert Advisors have years of experience conducting numerous successful multifamily transactions. They are here to help clients understand and navigate current market conditions, availabilities, and the various challenges that arise during due diligence and purchasing stages. Contact one of our multifamily property experts today!
About Us – The team at SVN | Graham, Langlois & Legendre has over 99-years of combined experience helping clients across the Baton Rouge market get the most value out of their CRE investment. Contact one of our dedicated CRE professionals today with any questions you may have and start seeing the returns in a market that will make sure to give today, tomorrow and for the extended future. To reach us, you can call us at 225.367.1515 or you can send us a message on our website. You can also follow us on Twitter at @svngll or on Facebook.