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Scaling Up: Investing in Multi-Family Properties

Exterior Shot of Federal Way Multi-Family HousingIf you’re intending to take your Federal Way rental property business to the next level, you’re in luck. Notwithstanding a lot of rental property investors begin by procuring single-family homes, keeping an investment portfolio growing often means bringing in multi-family properties to the mix. This guide will walk you through how to scale your investments and procure your first multi-family property. We’ll cover everything from spotting an excellent property to financing and managing it effectively. So, whether you’re a capable investor or have only just begun, this guide has something for you!

Multi-family rental property investing, and why should you consider it?

Multi-family rental property investing is purchasing and managing multiple rental properties, oftentimes with two or more units. There are a few reasons why this type of investing can be beneficial:

  • With multiple units, you have a higher chance to bring about higher returns than with single-family homes. The reason is that you can collect rent from various tenants, which can help offset any vacancy costs.
  • Multi-family properties often appreciate at a faster rate compared to single-family homes so they can be a substantial and really good long-term investment.
  • They can be more worry-free to manage than single-family rental properties given that the units frequently have the same systems and appliances, etc.

Things to keep in mind when investing in a multi-family property

Before you kick off going after that suitable and desired multi-family property, there are a few things you’ll want to remember:

  • Location is key. As with any rental property investment, the location of your multi-family home will be one of the necessary factors in determining its success. Look at properties in areas with strong job growth and population density. These places will possibly have a high demand for rental units, which can help you keep your units filled and keep down vacancy rates.
  • Financing can be quite tough. Multi-family properties can oftentimes be more expensive than single-family homes, so you need to be prepared with a larger down payment and/or a higher credit score. You may indeed need to get creative with your financing, such as making use of a home equity line of credit or private loans.
  • Management is key. Managing multiple rental units can be punishing, so it’s necessary to have an experienced and effective Federal Way property manager in place. Look for someone with experience working multi-family properties and an ideal track record of keeping units filled and tenants happy and satisfied.

How to find the right multi-family property for your needs

Now that you determine what to take into account, it’s time to begin going in search of that ideal multi-family property. Here are a few tips on how to find the right one for your needs:

  • Take advantage of online resources. The internet is an excellent tool for searching for rental properties, and a lot of websites and search engines are dedicated to this task. Try searching for keywords like “multi-family homes for sale” or “apartments for rent” to start.
  • Communicate with a real estate agent. If you’re unclear about where to start your search, a real estate agent can be an effective resource. They’ll be in the know about the local market and can help you procure properties that fit your budget and investment goals.
  • Drive around. One of the best means to get good rental properties is just to drive around and discover “for rent” signs. This can be the best thing to find properties off the beaten path that may not be listed online.

Assuming you’ve identified quite a few potential properties, it’s time to set off evaluating them. Here are several things to watch out for:

  • The condition of the property. Is it well-maintained or in need of repairs? Properties that need work can be the best investment, although you have to factor in the cost of repairs when considering your return on investment.
  • The rental market in the area. Is there a greater demand for rental units? What is the average rent for similar units in the area? Being aware of these particulars can help you price your units competitively and bring about a substantial return on investment.
  • The potential for appreciation. Is the property located in an area experiencing population growth or job growth? These factors can cause increased demand for rental units and higher rents, leading to a higher investment return.

Scaling up your rental property investments can be an effective way to build wealth and secure your financial future. By following these tips, you can acquire a good multi-family property for your needs and begin creating a healthy return on investment.

 

One of the best ways to find bargain properties and optimize your investment portfolio is to work with a rental market expert. Contact Real Property Management Excelled at 253-275-5999 to learn more if you want to know more about all the great services we offer investors like you!

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